Correlation Between NYSE Composite and Jhancock Multi-index
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Jhancock Multi-index 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 Jhancock Multi-index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Jhancock Multi Index 2065, you can compare the effects of market volatilities on NYSE Composite and Jhancock Multi-index 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 Jhancock Multi-index. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Jhancock Multi-index.
Diversification Opportunities for NYSE Composite and Jhancock Multi-index
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Jhancock is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Jhancock Multi Index 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multi Index 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 Jhancock Multi-index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multi Index has no effect on the direction of NYSE Composite i.e., NYSE Composite and Jhancock Multi-index go up and down completely randomly.
Pair Corralation between NYSE Composite and Jhancock Multi-index
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.98 times more return on investment than Jhancock Multi-index. However, NYSE Composite is 1.02 times less risky than Jhancock Multi-index. It trades about 0.23 of its potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.13 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Jhancock Multi Index 2065
Performance |
| Timeline |
NYSE Composite and Jhancock Multi-index Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Jhancock Multi Index 2065
Pair trading matchups for Jhancock Multi-index
Pair Trading with NYSE Composite and Jhancock Multi-index
The main advantage of trading using opposite NYSE Composite and Jhancock Multi-index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Jhancock Multi-index 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 Jhancock Multi-index will offset losses from the drop in Jhancock Multi-index's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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