Correlation Between NYSE Composite and Kona Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kona Gold 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 Kona Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kona Gold Solutions, you can compare the effects of market volatilities on NYSE Composite and Kona Gold 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 Kona Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kona Gold.
Diversification Opportunities for NYSE Composite and Kona Gold
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Kona is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kona Gold Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kona Gold Solutions 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 Kona Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kona Gold Solutions has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kona Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and Kona Gold
Assuming the 90 days trading horizon NYSE Composite is expected to generate 12.2 times less return on investment than Kona Gold. But when comparing it to its historical volatility, NYSE Composite is 22.52 times less risky than Kona Gold. It trades about 0.08 of its potential returns per unit of risk. Kona Gold Solutions is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.32 in Kona Gold Solutions on August 29, 2024 and sell it today you would lose (0.29) from holding Kona Gold Solutions or give up 90.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Kona Gold Solutions
Performance |
| Timeline |
NYSE Composite and Kona Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kona Gold Solutions
Pair trading matchups for Kona Gold
Pair Trading with NYSE Composite and Kona Gold
The main advantage of trading using opposite NYSE Composite and Kona Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kona Gold 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 Kona Gold will offset losses from the drop in Kona Gold's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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