Correlation Between NYSE Composite and IHS Holding
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IHS Holding 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 IHS Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and IHS Holding, you can compare the effects of market volatilities on NYSE Composite and IHS Holding 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 IHS Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IHS Holding.
Diversification Opportunities for NYSE Composite and IHS Holding
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and IHS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and IHS Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHS Holding 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 IHS Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHS Holding has no effect on the direction of NYSE Composite i.e., NYSE Composite and IHS Holding go up and down completely randomly.
Pair Corralation between NYSE Composite and IHS Holding
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.2 times more return on investment than IHS Holding. However, NYSE Composite is 4.89 times less risky than IHS Holding. It trades about 0.12 of its potential returns per unit of risk. IHS Holding is currently generating about -0.02 per unit of risk. If you would invest 1,800,701 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 196,129 from holding NYSE Composite or generate 10.89% 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. IHS Holding
Performance |
| Timeline |
NYSE Composite and IHS Holding Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
IHS Holding
Pair trading matchups for IHS Holding
Pair Trading with NYSE Composite and IHS Holding
The main advantage of trading using opposite NYSE Composite and IHS Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IHS Holding 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 IHS Holding will offset losses from the drop in IHS Holding's long position.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| IHS Holding vs. Cogent Communications Group | IHS Holding vs. IDT Corporation | IHS Holding vs. Iridium Communications | IHS Holding vs. Cable One |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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