Correlation Between NYSE Composite and Juva Life
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Juva Life 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 Juva Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Juva Life, you can compare the effects of market volatilities on NYSE Composite and Juva Life 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 Juva Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Juva Life.
Diversification Opportunities for NYSE Composite and Juva Life
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Juva is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Juva Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juva Life 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 Juva Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juva Life has no effect on the direction of NYSE Composite i.e., NYSE Composite and Juva Life go up and down completely randomly.
Pair Corralation between NYSE Composite and Juva Life
Assuming the 90 days trading horizon NYSE Composite is expected to generate 171.31 times less return on investment than Juva Life. But when comparing it to its historical volatility, NYSE Composite is 364.4 times less risky than Juva Life. It trades about 0.42 of its potential returns per unit of risk. Juva Life is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Juva Life on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Juva Life or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Juva Life
Performance |
| Timeline |
NYSE Composite and Juva Life Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Juva Life
Pair trading matchups for Juva Life
Pair Trading with NYSE Composite and Juva Life
The main advantage of trading using opposite NYSE Composite and Juva Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Juva Life 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 Juva Life will offset losses from the drop in Juva Life's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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