Correlation Between NYSE Composite and Lifex Income
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lifex Income 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 Lifex Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lifex Income, you can compare the effects of market volatilities on NYSE Composite and Lifex Income 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 Lifex Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lifex Income.
Diversification Opportunities for NYSE Composite and Lifex Income
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Lifex is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lifex Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Income 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 Lifex Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lifex Income go up and down completely randomly.
Pair Corralation between NYSE Composite and Lifex Income
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.52 times more return on investment than Lifex Income. However, NYSE Composite is 1.52 times more volatile than Lifex Income. It trades about 0.14 of its potential returns per unit of risk. Lifex Income is currently generating about 0.14 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
NYSE Composite vs. Lifex Income
Performance |
| Timeline |
NYSE Composite and Lifex Income Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lifex Income
Pair trading matchups for Lifex Income
Pair Trading with NYSE Composite and Lifex Income
The main advantage of trading using opposite NYSE Composite and Lifex Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lifex Income 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 Lifex Income will offset losses from the drop in Lifex Income's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Lifex Income vs. Virtus Convertible | Lifex Income vs. Putnam Convertible Incm Gwth | Lifex Income vs. Columbia Vertible Securities | Lifex Income vs. Fidelity Sai Convertible |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |