Correlation Between NYSE Composite and Transamerica Multi-managed
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Transamerica Multi-managed at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Transamerica Multi-managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Transamerica Multi Managed Balanced, you can compare the effects of market volatilities on NYSE Composite and Transamerica Multi-managed and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Transamerica Multi-managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Transamerica Multi-managed.
Diversification Opportunities for NYSE Composite and Transamerica Multi-managed
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Transamerica is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Transamerica Multi Managed Bal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Multi-managed and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Transamerica Multi-managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Multi-managed has no effect on the direction of NYSE Composite i.e., NYSE Composite and Transamerica Multi-managed go up and down completely randomly.
Pair Corralation between NYSE Composite and Transamerica Multi-managed
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.32 times more return on investment than Transamerica Multi-managed. However, NYSE Composite is 1.32 times more volatile than Transamerica Multi Managed Balanced. It trades about 0.14 of its potential returns per unit of risk. Transamerica Multi Managed Balanced is currently generating about 0.15 per unit of risk. If you would invest 1,800,696 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Transamerica Multi Managed Bal
Performance |
| Timeline |
NYSE Composite and Transamerica Multi-managed Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Transamerica Multi Managed Balanced
Pair trading matchups for Transamerica Multi-managed
Pair Trading with NYSE Composite and Transamerica Multi-managed
The main advantage of trading using opposite NYSE Composite and Transamerica Multi-managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Transamerica Multi-managed can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Transamerica Multi-managed will offset losses from the drop in Transamerica Multi-managed's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |