Correlation Between NYSE Composite and Ladenburg Thalmann
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Ladenburg Thalmann 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 Ladenburg Thalmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ladenburg Thalmann Financial, you can compare the effects of market volatilities on NYSE Composite and Ladenburg Thalmann 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 Ladenburg Thalmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ladenburg Thalmann.
Diversification Opportunities for NYSE Composite and Ladenburg Thalmann
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Ladenburg is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann 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 Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of NYSE Composite i.e., NYSE Composite and Ladenburg Thalmann go up and down completely randomly.
Pair Corralation between NYSE Composite and Ladenburg Thalmann
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.63 times less return on investment than Ladenburg Thalmann. But when comparing it to its historical volatility, NYSE Composite is 2.82 times less risky than Ladenburg Thalmann. It trades about 0.08 of its potential returns per unit of risk. Ladenburg Thalmann Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,019 in Ladenburg Thalmann Financial on September 14, 2024 and sell it today you would earn a total of 581.00 from holding Ladenburg Thalmann Financial or generate 57.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.67% |
| Values | Daily Returns |
NYSE Composite vs. Ladenburg Thalmann Financial
Performance |
| Timeline |
NYSE Composite and Ladenburg Thalmann Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ladenburg Thalmann Financial
Pair trading matchups for Ladenburg Thalmann
Pair Trading with NYSE Composite and Ladenburg Thalmann
The main advantage of trading using opposite NYSE Composite and Ladenburg Thalmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Ladenburg Thalmann 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 Ladenburg Thalmann will offset losses from the drop in Ladenburg Thalmann's long position.| NYSE Composite vs. Air Products and | NYSE Composite vs. Allient | NYSE Composite vs. Ecovyst | NYSE Composite vs. CTS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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