Correlation Between NYSE Composite and INAQ Old
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and INAQ Old 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 INAQ Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and INAQ Old, you can compare the effects of market volatilities on NYSE Composite and INAQ Old 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 INAQ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and INAQ Old.
Diversification Opportunities for NYSE Composite and INAQ Old
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and INAQ is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and INAQ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INAQ Old 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 INAQ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INAQ Old has no effect on the direction of NYSE Composite i.e., NYSE Composite and INAQ Old go up and down completely randomly.
Pair Corralation between NYSE Composite and INAQ Old
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.08 times more return on investment than INAQ Old. However, NYSE Composite is 12.28 times less risky than INAQ Old. It trades about 0.05 of its potential returns per unit of risk. INAQ Old is currently generating about -0.02 per unit of risk. If you would invest 1,954,967 in NYSE Composite on October 26, 2024 and sell it today you would earn a total of 42,911 from holding NYSE Composite or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.32% |
| Values | Daily Returns |
NYSE Composite vs. INAQ Old
Performance |
| Timeline |
NYSE Composite and INAQ Old Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
INAQ Old
Pair trading matchups for INAQ Old
Pair Trading with NYSE Composite and INAQ Old
The main advantage of trading using opposite NYSE Composite and INAQ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, INAQ Old 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 INAQ Old will offset losses from the drop in INAQ Old's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. Proficient Auto Logistics, | NYSE Composite vs. Hafnia Limited | NYSE Composite vs. Arm Holdings plc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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