Correlation Between NYSE Composite and Kone Oyj
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kone Oyj 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 Kone Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kone Oyj ADR, you can compare the effects of market volatilities on NYSE Composite and Kone Oyj 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 Kone Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kone Oyj.
Diversification Opportunities for NYSE Composite and Kone Oyj
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Kone is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kone Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kone Oyj ADR 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 Kone Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kone Oyj ADR has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kone Oyj go up and down completely randomly.
Pair Corralation between NYSE Composite and Kone Oyj
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.43 times more return on investment than Kone Oyj. However, NYSE Composite is 2.3 times less risky than Kone Oyj. It trades about 0.19 of its potential returns per unit of risk. Kone Oyj ADR is currently generating about -0.24 per unit of risk. If you would invest 1,956,073 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 56,272 from holding NYSE Composite or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Kone Oyj ADR
Performance |
| Timeline |
NYSE Composite and Kone Oyj Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kone Oyj ADR
Pair trading matchups for Kone Oyj
Pair Trading with NYSE Composite and Kone Oyj
The main advantage of trading using opposite NYSE Composite and Kone Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kone Oyj 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 Kone Oyj will offset losses from the drop in Kone Oyj's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Kone Oyj vs. Aumann AG | Kone Oyj vs. Arista Power | Kone Oyj vs. Atlas Copco AB | Kone Oyj vs. American Commerce Solutions |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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