Correlation Between NYSE Composite and Investor
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Investor 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 Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Investor AB ser, you can compare the effects of market volatilities on NYSE Composite and Investor 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 Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Investor.
Diversification Opportunities for NYSE Composite and Investor
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Investor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of NYSE Composite i.e., NYSE Composite and Investor go up and down completely randomly.
Pair Corralation between NYSE Composite and Investor
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.22 times less return on investment than Investor. But when comparing it to its historical volatility, NYSE Composite is 2.7 times less risky than Investor. It trades about 0.09 of its potential returns per unit of risk. Investor AB ser is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,827 in Investor AB ser on December 2, 2024 and sell it today you would earn a total of 1,179 from holding Investor AB ser or generate 64.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 81.01% |
| Values | Daily Returns |
NYSE Composite vs. Investor AB ser
Performance |
| Timeline |
NYSE Composite and Investor Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Investor AB ser
Pair trading matchups for Investor
Pair Trading with NYSE Composite and Investor
The main advantage of trading using opposite NYSE Composite and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.| NYSE Composite vs. Jerash Holdings | ||
| NYSE Composite vs. European Wax Center | ||
| NYSE Composite vs. Ralph Lauren Corp | ||
| NYSE Composite vs. Toro Co |
| Investor vs. Guggenheim Strategic Opportunities | ||
| Investor vs. Pimco Dynamic Income | ||
| Investor vs. Rivernorth Opportunities | ||
| Investor vs. Cornerstone Strategic Value |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |