Correlation Between NYSE Composite and Invictus Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Invictus Energy 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 Invictus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Invictus Energy Limited, you can compare the effects of market volatilities on NYSE Composite and Invictus Energy 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 Invictus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Invictus Energy.
Diversification Opportunities for NYSE Composite and Invictus Energy
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Invictus is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Invictus Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus Energy 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 Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Invictus Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Invictus Energy
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Invictus Energy. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 18.3 times less risky than Invictus Energy. The index trades about -0.05 of its potential returns per unit of risk. The Invictus Energy Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Invictus Energy Limited on November 27, 2024 and sell it today you would lose (0.07) from holding Invictus Energy Limited or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Invictus Energy Limited
Performance |
| Timeline |
NYSE Composite and Invictus Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Invictus Energy Limited
Pair trading matchups for Invictus Energy
Pair Trading with NYSE Composite and Invictus Energy
The main advantage of trading using opposite NYSE Composite and Invictus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Invictus Energy 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 Invictus Energy will offset losses from the drop in Invictus Energy's long position.| NYSE Composite vs. Unum Group | NYSE Composite vs. Palomar Holdings | NYSE Composite vs. Fidelity National Financial | NYSE Composite vs. ZW Data Action |
| Invictus Energy vs. Sintana Energy | Invictus Energy vs. 88 Energy Limited | Invictus Energy vs. Journey Energy | Invictus Energy vs. Trillion Energy International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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