Correlation Between NYSE Composite and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lotus Technology 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 Lotus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lotus Technology Warrants, you can compare the effects of market volatilities on NYSE Composite and Lotus Technology 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 Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lotus Technology.
Diversification Opportunities for NYSE Composite and Lotus Technology
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Lotus is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lotus Technology Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology Warrants 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 Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology Warrants has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lotus Technology go up and down completely randomly.
Pair Corralation between NYSE Composite and Lotus Technology
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.02 times less return on investment than Lotus Technology. But when comparing it to its historical volatility, NYSE Composite is 21.21 times less risky than Lotus Technology. It trades about 0.08 of its potential returns per unit of risk. Lotus Technology Warrants is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Lotus Technology Warrants on August 24, 2024 and sell it today you would lose (46.00) from holding Lotus Technology Warrants or give up 63.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 29.64% |
| Values | Daily Returns |
NYSE Composite vs. Lotus Technology Warrants
Performance |
| Timeline |
NYSE Composite and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lotus Technology Warrants
Pair trading matchups for Lotus Technology
Pair Trading with NYSE Composite and Lotus Technology
The main advantage of trading using opposite NYSE Composite and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lotus Technology 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 Lotus Technology will offset losses from the drop in Lotus Technology's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Lotus Technology vs. Kinsale Capital Group | Lotus Technology vs. Natural Alternatives International | Lotus Technology vs. Bridgford Foods | Lotus Technology vs. Employers Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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