Correlation Between NYSE Composite and Strategic Income
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Strategic Income 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 Strategic Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Strategic Income Opportunities, you can compare the effects of market volatilities on NYSE Composite and Strategic Income 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 Strategic Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Strategic Income.
Diversification Opportunities for NYSE Composite and Strategic Income
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Strategic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Strategic Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Income Opp 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 Strategic Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Income Opp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Strategic Income go up and down completely randomly.
Pair Corralation between NYSE Composite and Strategic Income
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.35 times more return on investment than Strategic Income. However, NYSE Composite is 4.35 times more volatile than Strategic Income Opportunities. It trades about 0.41 of its potential returns per unit of risk. Strategic Income Opportunities is currently generating about 0.23 per unit of risk. If you would invest 1,909,710 in NYSE Composite on November 1, 2024 and sell it today you would earn a total of 106,912 from holding NYSE Composite or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Strategic Income Opportunities
Performance |
| Timeline |
NYSE Composite and Strategic Income Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Strategic Income Opportunities
Pair trading matchups for Strategic Income
Pair Trading with NYSE Composite and Strategic Income
The main advantage of trading using opposite NYSE Composite and Strategic Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Strategic Income 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 Strategic Income will offset losses from the drop in Strategic Income's long position.| NYSE Composite vs. Western Copper and | NYSE Composite vs. Chemours Co | NYSE Composite vs. IPG Photonics | NYSE Composite vs. Morgan Advanced Materials |
| Strategic Income vs. Ambrus Core Bond | Strategic Income vs. California Municipal Portfolio | Strategic Income vs. Artisan High Income | Strategic Income vs. Ab Bond Inflation |
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 CEOs Directory module to screen CEOs from public companies around the world.
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