Correlation Between NYSE Composite and Lindsay
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lindsay 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 Lindsay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lindsay, you can compare the effects of market volatilities on NYSE Composite and Lindsay 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 Lindsay. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lindsay.
Diversification Opportunities for NYSE Composite and Lindsay
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Lindsay is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay 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 Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lindsay go up and down completely randomly.
Pair Corralation between NYSE Composite and Lindsay
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.89 times less return on investment than Lindsay. But when comparing it to its historical volatility, NYSE Composite is 3.68 times less risky than Lindsay. It trades about 0.17 of its potential returns per unit of risk. Lindsay is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,877 in Lindsay on August 31, 2024 and sell it today you would earn a total of 1,285 from holding Lindsay or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Lindsay
Performance |
| Timeline |
NYSE Composite and Lindsay Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lindsay
Pair trading matchups for Lindsay
Pair Trading with NYSE Composite and Lindsay
The main advantage of trading using opposite NYSE Composite and Lindsay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lindsay 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 Lindsay will offset losses from the drop in Lindsay's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Lindsay vs. Columbus McKinnon | Lindsay vs. Astec Industries | Lindsay vs. Shyft Group | Lindsay vs. AGCO Corporation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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