Correlation Between NYSE Composite and Infinera
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Infinera 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 Infinera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Infinera, you can compare the effects of market volatilities on NYSE Composite and Infinera 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 Infinera. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Infinera.
Diversification Opportunities for NYSE Composite and Infinera
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Infinera is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Infinera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinera 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 Infinera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinera has no effect on the direction of NYSE Composite i.e., NYSE Composite and Infinera go up and down completely randomly.
Pair Corralation between NYSE Composite and Infinera
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.23 times more return on investment than Infinera. However, NYSE Composite is 4.39 times less risky than Infinera. It trades about 0.07 of its potential returns per unit of risk. Infinera is currently generating about 0.01 per unit of risk. If you would invest 1,591,069 in NYSE Composite on November 1, 2024 and sell it today you would earn a total of 401,678 from holding NYSE Composite or generate 25.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NYSE Composite vs. Infinera
Performance |
| Timeline |
NYSE Composite and Infinera Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Infinera
Pair trading matchups for Infinera
Pair Trading with NYSE Composite and Infinera
The main advantage of trading using opposite NYSE Composite and Infinera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Infinera 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 Infinera will offset losses from the drop in Infinera's long position.| NYSE Composite vs. Pembina Pipeline | NYSE Composite vs. Precision Drilling | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Transocean |
| Infinera vs. Comtech Telecommunications Corp | Infinera vs. Silicom | Infinera vs. Knowles Cor | Infinera vs. Mynaric AG ADR |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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