Correlation Between NYSE Composite and Leuthold Core
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Leuthold Core 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 Leuthold Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Leuthold E Investment, you can compare the effects of market volatilities on NYSE Composite and Leuthold Core 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 Leuthold Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Leuthold Core.
Diversification Opportunities for NYSE Composite and Leuthold Core
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Leuthold is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Leuthold E Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leuthold E Investment 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 Leuthold Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leuthold E Investment has no effect on the direction of NYSE Composite i.e., NYSE Composite and Leuthold Core go up and down completely randomly.
Pair Corralation between NYSE Composite and Leuthold Core
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.46 times more return on investment than Leuthold Core. However, NYSE Composite is 1.46 times more volatile than Leuthold E Investment. It trades about 0.42 of its potential returns per unit of risk. Leuthold E Investment is currently generating about 0.52 per unit of risk. If you would invest 1,909,542 in NYSE Composite on November 2, 2024 and sell it today you would earn a total of 107,080 from holding NYSE Composite or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
NYSE Composite vs. Leuthold E Investment
Performance |
| Timeline |
NYSE Composite and Leuthold Core Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Leuthold E Investment
Pair trading matchups for Leuthold Core
Pair Trading with NYSE Composite and Leuthold Core
The main advantage of trading using opposite NYSE Composite and Leuthold Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Leuthold Core 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 Leuthold Core will offset losses from the drop in Leuthold Core's long position.| NYSE Composite vs. Western Copper and | NYSE Composite vs. Chemours Co | NYSE Composite vs. IPG Photonics | NYSE Composite vs. Morgan Advanced Materials |
| Leuthold Core vs. Leuthold E Investment | Leuthold Core vs. Leuthold Select Industries | Leuthold Core vs. Hotchkis Wiley Small | Leuthold Core vs. Calvert Moderate Allocation |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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