Correlation Between NYSE Composite and IMedia Brands
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IMedia Brands 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 IMedia Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and IMedia Brands, you can compare the effects of market volatilities on NYSE Composite and IMedia Brands 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 IMedia Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IMedia Brands.
Diversification Opportunities for NYSE Composite and IMedia Brands
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and IMedia is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and IMedia Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMedia Brands 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 IMedia Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMedia Brands has no effect on the direction of NYSE Composite i.e., NYSE Composite and IMedia Brands go up and down completely randomly.
Pair Corralation between NYSE Composite and IMedia Brands
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.06 times more return on investment than IMedia Brands. However, NYSE Composite is 17.13 times less risky than IMedia Brands. It trades about 0.08 of its potential returns per unit of risk. IMedia Brands is currently generating about -0.09 per unit of risk. If you would invest 1,549,498 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 471,824 from holding NYSE Composite or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 30.51% |
| Values | Daily Returns |
NYSE Composite vs. IMedia Brands
Performance |
| Timeline |
NYSE Composite and IMedia Brands Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
IMedia Brands
Pair trading matchups for IMedia Brands
Pair Trading with NYSE Composite and IMedia Brands
The main advantage of trading using opposite NYSE Composite and IMedia Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IMedia Brands 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 IMedia Brands will offset losses from the drop in IMedia Brands' long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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