Correlation Between NYSE Composite and Laser Photonics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Laser Photonics 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 Laser Photonics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Laser Photonics, you can compare the effects of market volatilities on NYSE Composite and Laser Photonics 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 Laser Photonics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Laser Photonics.
Diversification Opportunities for NYSE Composite and Laser Photonics
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Laser is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Laser Photonics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laser Photonics 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 Laser Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laser Photonics has no effect on the direction of NYSE Composite i.e., NYSE Composite and Laser Photonics go up and down completely randomly.
Pair Corralation between NYSE Composite and Laser Photonics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 9.37 times less return on investment than Laser Photonics. But when comparing it to its historical volatility, NYSE Composite is 17.43 times less risky than Laser Photonics. It trades about 0.11 of its potential returns per unit of risk. Laser Photonics is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 388.00 in Laser Photonics on August 31, 2024 and sell it today you would earn a total of 171.00 from holding Laser Photonics or generate 44.07% 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. Laser Photonics
Performance |
| Timeline |
NYSE Composite and Laser Photonics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Laser Photonics
Pair trading matchups for Laser Photonics
Pair Trading with NYSE Composite and Laser Photonics
The main advantage of trading using opposite NYSE Composite and Laser Photonics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Laser Photonics 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 Laser Photonics will offset losses from the drop in Laser Photonics' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Laser Photonics vs. Nuburu Inc | Laser Photonics vs. JE Cleantech Holdings | Laser Photonics vs. Reelcause | Laser Photonics vs. Shapeways Holdings, Common |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |