Correlation Between NYSE Composite and Iluka Resources
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Iluka Resources 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 Iluka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Iluka Resources Ltd, you can compare the effects of market volatilities on NYSE Composite and Iluka Resources 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 Iluka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Iluka Resources.
Diversification Opportunities for NYSE Composite and Iluka Resources
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Iluka is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Iluka Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iluka Resources 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 Iluka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iluka Resources has no effect on the direction of NYSE Composite i.e., NYSE Composite and Iluka Resources go up and down completely randomly.
Pair Corralation between NYSE Composite and Iluka Resources
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.24 times more return on investment than Iluka Resources. However, NYSE Composite is 4.2 times less risky than Iluka Resources. It trades about 0.27 of its potential returns per unit of risk. Iluka Resources Ltd is currently generating about -0.33 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Iluka Resources Ltd
Performance |
| Timeline |
NYSE Composite and Iluka Resources Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Iluka Resources Ltd
Pair trading matchups for Iluka Resources
Pair Trading with NYSE Composite and Iluka Resources
The main advantage of trading using opposite NYSE Composite and Iluka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Iluka Resources 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 Iluka Resources will offset losses from the drop in Iluka Resources' long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Iluka Resources vs. ERAMET SA | Iluka Resources vs. Giyani Metals Corp | Iluka Resources vs. IGO Limited | Iluka Resources vs. Grid Metals Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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