Correlation Between NYSE Composite and Insmed
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Insmed 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 Insmed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Insmed Inc, you can compare the effects of market volatilities on NYSE Composite and Insmed 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 Insmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Insmed.
Diversification Opportunities for NYSE Composite and Insmed
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Insmed is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Insmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insmed Inc 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 Insmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insmed Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Insmed go up and down completely randomly.
Pair Corralation between NYSE Composite and Insmed
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.2 times less return on investment than Insmed. But when comparing it to its historical volatility, NYSE Composite is 5.18 times less risky than Insmed. It trades about 0.24 of its potential returns per unit of risk. Insmed Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,196 in Insmed Inc on August 28, 2024 and sell it today you would earn a total of 213.00 from holding Insmed Inc or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Insmed Inc
Performance |
| Timeline |
NYSE Composite and Insmed Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Insmed Inc
Pair trading matchups for Insmed
Pair Trading with NYSE Composite and Insmed
The main advantage of trading using opposite NYSE Composite and Insmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Insmed 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 Insmed will offset losses from the drop in Insmed's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Insmed vs. Ascendis Pharma AS | Insmed vs. Apellis Pharmaceuticals | Insmed vs. BeiGene | Insmed vs. Akero Therapeutics |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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