Correlation Between NYSE Composite and Lion Copper
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lion Copper 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 Lion Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lion Copper and, you can compare the effects of market volatilities on NYSE Composite and Lion Copper 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 Lion Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lion Copper.
Diversification Opportunities for NYSE Composite and Lion Copper
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Lion is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lion Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Copper 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 Lion Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Copper has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lion Copper go up and down completely randomly.
Pair Corralation between NYSE Composite and Lion Copper
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.1 times more return on investment than Lion Copper. However, NYSE Composite is 10.1 times less risky than Lion Copper. It trades about 0.43 of its potential returns per unit of risk. Lion Copper and is currently generating about 0.03 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 102,865 from holding NYSE Composite or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Lion Copper and
Performance |
| Timeline |
NYSE Composite and Lion Copper Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lion Copper and
Pair trading matchups for Lion Copper
Pair Trading with NYSE Composite and Lion Copper
The main advantage of trading using opposite NYSE Composite and Lion Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lion Copper 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 Lion Copper will offset losses from the drop in Lion Copper's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Lion Copper vs. Qubec Nickel Corp | Lion Copper vs. IGO Limited | Lion Copper vs. Avarone Metals | Lion Copper vs. Adriatic Metals PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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