Correlation Between NYSE Composite and Kensington Managed
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kensington Managed 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 Kensington Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kensington Managed Income, you can compare the effects of market volatilities on NYSE Composite and Kensington Managed 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 Kensington Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kensington Managed.
Diversification Opportunities for NYSE Composite and Kensington Managed
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Kensington is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kensington Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Managed Income 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 Kensington Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Managed Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kensington Managed go up and down completely randomly.
Pair Corralation between NYSE Composite and Kensington Managed
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.94 times more return on investment than Kensington Managed. However, NYSE Composite is 2.94 times more volatile than Kensington Managed Income. It trades about 0.11 of its potential returns per unit of risk. Kensington Managed Income is currently generating about 0.1 per unit of risk. If you would invest 1,554,847 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 472,357 from holding NYSE Composite or generate 30.38% 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. Kensington Managed Income
Performance |
| Timeline |
NYSE Composite and Kensington Managed Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kensington Managed Income
Pair trading matchups for Kensington Managed
Pair Trading with NYSE Composite and Kensington Managed
The main advantage of trading using opposite NYSE Composite and Kensington Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kensington Managed 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 Kensington Managed will offset losses from the drop in Kensington Managed's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Kensington Managed vs. Victory Rs Small | Kensington Managed vs. Qs Growth Fund | Kensington Managed vs. Legg Mason Partners | Kensington Managed vs. L Abbett Growth |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |