Correlation Between NYSE Composite and Knorr-Bremse Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Knorr-Bremse Aktiengesellscha 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 Knorr-Bremse Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Knorr Bremse Aktiengesellschaft, you can compare the effects of market volatilities on NYSE Composite and Knorr-Bremse Aktiengesellscha 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 Knorr-Bremse Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Knorr-Bremse Aktiengesellscha.
Diversification Opportunities for NYSE Composite and Knorr-Bremse Aktiengesellscha
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Knorr-Bremse is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Knorr Bremse Aktiengesellschaf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knorr-Bremse Aktiengesellscha 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 Knorr-Bremse Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knorr-Bremse Aktiengesellscha has no effect on the direction of NYSE Composite i.e., NYSE Composite and Knorr-Bremse Aktiengesellscha go up and down completely randomly.
Pair Corralation between NYSE Composite and Knorr-Bremse Aktiengesellscha
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.38 times more return on investment than Knorr-Bremse Aktiengesellscha. However, NYSE Composite is 2.65 times less risky than Knorr-Bremse Aktiengesellscha. It trades about 0.38 of its potential returns per unit of risk. Knorr Bremse Aktiengesellschaft is currently generating about -0.08 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 96,983 from holding NYSE Composite or generate 5.04% 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. Knorr Bremse Aktiengesellschaf
Performance |
| Timeline |
NYSE Composite and Knorr-Bremse Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Knorr Bremse Aktiengesellschaft
Pair trading matchups for Knorr-Bremse Aktiengesellscha
Pair Trading with NYSE Composite and Knorr-Bremse Aktiengesellscha
The main advantage of trading using opposite NYSE Composite and Knorr-Bremse Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Knorr-Bremse Aktiengesellscha 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 Knorr-Bremse Aktiengesellscha will offset losses from the drop in Knorr-Bremse Aktiengesellscha's long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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