Correlation Between NYSE Composite and IShares Global
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IShares Global 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 IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and iShares Global Clean, you can compare the effects of market volatilities on NYSE Composite and IShares Global 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 IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IShares Global.
Diversification Opportunities for NYSE Composite and IShares Global
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and IShares is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and iShares Global Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Clean 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 IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Clean has no effect on the direction of NYSE Composite i.e., NYSE Composite and IShares Global go up and down completely randomly.
Pair Corralation between NYSE Composite and IShares Global
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.32 times more return on investment than IShares Global. However, NYSE Composite is 3.1 times less risky than IShares Global. It trades about 0.29 of its potential returns per unit of risk. iShares Global Clean is currently generating about -0.13 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. iShares Global Clean
Performance |
| Timeline |
NYSE Composite and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
iShares Global Clean
Pair trading matchups for IShares Global
Pair Trading with NYSE Composite and IShares Global
The main advantage of trading using opposite NYSE Composite and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IShares Global 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 IShares Global will offset losses from the drop in IShares Global's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| IShares Global vs. Invesco Solar ETF | IShares Global vs. First Trust NASDAQ | IShares Global vs. Invesco WilderHill Clean | IShares Global vs. Global X Lithium |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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