Correlation Between NYSE Composite and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IF Bancorp 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 IF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and IF Bancorp, you can compare the effects of market volatilities on NYSE Composite and IF Bancorp 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 IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IF Bancorp.
Diversification Opportunities for NYSE Composite and IF Bancorp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and IROQ is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp 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 IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of NYSE Composite i.e., NYSE Composite and IF Bancorp go up and down completely randomly.
Pair Corralation between NYSE Composite and IF Bancorp
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than IF Bancorp. However, NYSE Composite is 3.93 times less risky than IF Bancorp. It trades about 0.21 of its potential returns per unit of risk. IF Bancorp is currently generating about -0.03 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. IF Bancorp
Performance |
| Timeline |
NYSE Composite and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
IF Bancorp
Pair trading matchups for IF Bancorp
Pair Trading with NYSE Composite and IF Bancorp
The main advantage of trading using opposite NYSE Composite and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IF Bancorp 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 IF Bancorp will offset losses from the drop in IF Bancorp'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 |
| IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF Bancorp vs. Home Federal Bancorp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |