Correlation Between NYSE Composite and Kngt Clb
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kngt Clb 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 Kngt Clb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kngt Clb Larg, you can compare the effects of market volatilities on NYSE Composite and Kngt Clb 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 Kngt Clb. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kngt Clb.
Diversification Opportunities for NYSE Composite and Kngt Clb
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Kngt is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kngt Clb Larg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kngt Clb Larg 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 Kngt Clb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kngt Clb Larg has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kngt Clb go up and down completely randomly.
Pair Corralation between NYSE Composite and Kngt Clb
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.46 times less return on investment than Kngt Clb. But when comparing it to its historical volatility, NYSE Composite is 1.38 times less risky than Kngt Clb. It trades about 0.11 of its potential returns per unit of risk. Kngt Clb Larg is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,446 in Kngt Clb Larg on September 1, 2024 and sell it today you would earn a total of 683.00 from holding Kngt Clb Larg or generate 47.23% 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. Kngt Clb Larg
Performance |
| Timeline |
NYSE Composite and Kngt Clb Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kngt Clb Larg
Pair trading matchups for Kngt Clb
Pair Trading with NYSE Composite and Kngt Clb
The main advantage of trading using opposite NYSE Composite and Kngt Clb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kngt Clb 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 Kngt Clb will offset losses from the drop in Kngt Clb's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Kngt Clb vs. Biotechnology Ultrasector Profund | Kngt Clb vs. Goldman Sachs Technology | Kngt Clb vs. Fidelity Advisor Technology | Kngt Clb vs. Science Technology Fund |
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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