Correlation Between NYSE Composite and Perkins Select
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Perkins Select 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 Perkins Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Perkins Select Value, you can compare the effects of market volatilities on NYSE Composite and Perkins Select 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 Perkins Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Perkins Select.
Diversification Opportunities for NYSE Composite and Perkins Select
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Perkins is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Perkins Select Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Select Value 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 Perkins Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Select Value has no effect on the direction of NYSE Composite i.e., NYSE Composite and Perkins Select go up and down completely randomly.
Pair Corralation between NYSE Composite and Perkins Select
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.46 times less return on investment than Perkins Select. But when comparing it to its historical volatility, NYSE Composite is 1.85 times less risky than Perkins Select. It trades about 0.17 of its potential returns per unit of risk. Perkins Select Value is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,694 in Perkins Select Value on August 31, 2024 and sell it today you would earn a total of 154.00 from holding Perkins Select Value or generate 9.09% 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. Perkins Select Value
Performance |
| Timeline |
NYSE Composite and Perkins Select Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Perkins Select Value
Pair trading matchups for Perkins Select
Pair Trading with NYSE Composite and Perkins Select
The main advantage of trading using opposite NYSE Composite and Perkins Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Perkins Select 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 Perkins Select will offset losses from the drop in Perkins Select's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Perkins Select vs. Mesirow Financial Small | Perkins Select vs. 1919 Financial Services | Perkins Select vs. Transamerica Financial Life | Perkins Select vs. Fidelity Advisor Financial |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |