Correlation Between NYSE Composite and VanEck Indonesia
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and VanEck Indonesia 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 VanEck Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and VanEck Indonesia Index, you can compare the effects of market volatilities on NYSE Composite and VanEck Indonesia 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 VanEck Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and VanEck Indonesia.
Diversification Opportunities for NYSE Composite and VanEck Indonesia
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and VanEck is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and VanEck Indonesia Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Indonesia Index 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 VanEck Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Indonesia Index has no effect on the direction of NYSE Composite i.e., NYSE Composite and VanEck Indonesia go up and down completely randomly.
Pair Corralation between NYSE Composite and VanEck Indonesia
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.58 times more return on investment than VanEck Indonesia. However, NYSE Composite is 1.73 times less risky than VanEck Indonesia. It trades about 0.11 of its potential returns per unit of risk. VanEck Indonesia Index is currently generating about 0.0 per unit of risk. If you would invest 1,760,743 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 251,602 from holding NYSE Composite or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. VanEck Indonesia Index
Performance |
| Timeline |
NYSE Composite and VanEck Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
VanEck Indonesia Index
Pair trading matchups for VanEck Indonesia
Pair Trading with NYSE Composite and VanEck Indonesia
The main advantage of trading using opposite NYSE Composite and VanEck Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, VanEck Indonesia 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 VanEck Indonesia will offset losses from the drop in VanEck Indonesia's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| VanEck Indonesia vs. iShares MSCI Thailand | VanEck Indonesia vs. iShares MSCI Chile | VanEck Indonesia vs. iShares MSCI Turkey | VanEck Indonesia vs. Global X MSCI |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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