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 Infrastructure, 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
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and IShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and iShares Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Infra 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 Infra 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 0.91 times more return on investment than IShares Global. However, NYSE Composite is 1.1 times less risky than IShares Global. It trades about 0.08 of its potential returns per unit of risk. iShares Global Infrastructure is currently generating about 0.05 per unit of risk. If you would invest 1,556,254 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 465,068 from holding NYSE Composite or generate 29.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. iShares Global Infrastructure
Performance |
| Timeline |
NYSE Composite and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
iShares Global Infrastructure
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. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| IShares Global vs. Global X Infrastructure | IShares Global vs. FlexShares STOXX Global | IShares Global vs. Invesco Dynamic Leisure | IShares Global vs. SPDR SP Global |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |