Correlation Between NYSE Composite and Kirklands
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kirklands 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 Kirklands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kirklands, you can compare the effects of market volatilities on NYSE Composite and Kirklands 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 Kirklands. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kirklands.
Diversification Opportunities for NYSE Composite and Kirklands
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Kirklands is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kirklands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirklands 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 Kirklands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirklands has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kirklands go up and down completely randomly.
Pair Corralation between NYSE Composite and Kirklands
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.17 times more return on investment than Kirklands. However, NYSE Composite is 6.0 times less risky than Kirklands. It trades about 0.09 of its potential returns per unit of risk. Kirklands is currently generating about -0.04 per unit of risk. If you would invest 1,733,246 in NYSE Composite on November 8, 2024 and sell it today you would earn a total of 283,505 from holding NYSE Composite or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
NYSE Composite vs. Kirklands
Performance |
| Timeline |
NYSE Composite and Kirklands Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kirklands
Pair trading matchups for Kirklands
Pair Trading with NYSE Composite and Kirklands
The main advantage of trading using opposite NYSE Composite and Kirklands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kirklands 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 Kirklands will offset losses from the drop in Kirklands' long position.| NYSE Composite vs. The Coca Cola | NYSE Composite vs. Diageo PLC ADR | NYSE Composite vs. Diamond Estates Wines | NYSE Composite vs. Constellation Brands Class |
| Kirklands vs. Floor Decor Holdings | Kirklands vs. Haverty Furniture Companies | Kirklands vs. Tile Shop Holdings | Kirklands vs. Arhaus Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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