Correlation Between NYSE Composite and Lotus Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lotus Pharmaceuticals 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 Pharmaceuticals 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 Pharmaceuticals, you can compare the effects of market volatilities on NYSE Composite and Lotus Pharmaceuticals 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 Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lotus Pharmaceuticals.
Diversification Opportunities for NYSE Composite and Lotus Pharmaceuticals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Lotus is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lotus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Pharmaceuticals 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 Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Pharmaceuticals has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lotus Pharmaceuticals go up and down completely randomly.
Pair Corralation between NYSE Composite and Lotus Pharmaceuticals
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.06 times more return on investment than Lotus Pharmaceuticals. However, NYSE Composite is 16.82 times less risky than Lotus Pharmaceuticals. It trades about -0.02 of its potential returns per unit of risk. Lotus Pharmaceuticals is currently generating about -0.07 per unit of risk. If you would invest 1,998,000 in NYSE Composite on November 28, 2024 and sell it today you would lose (5,595) from holding NYSE Composite or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Lotus Pharmaceuticals
Performance |
| Timeline |
NYSE Composite and Lotus Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lotus Pharmaceuticals
Pair trading matchups for Lotus Pharmaceuticals
Pair Trading with NYSE Composite and Lotus Pharmaceuticals
The main advantage of trading using opposite NYSE Composite and Lotus Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lotus Pharmaceuticals 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 Pharmaceuticals will offset losses from the drop in Lotus Pharmaceuticals' long position.| NYSE Composite vs. Inter Parfums | NYSE Composite vs. Amkor Technology | NYSE Composite vs. Unilever PLC ADR | NYSE Composite vs. Estee Lauder Companies |
| Lotus Pharmaceuticals vs. China Teletech Holding | Lotus Pharmaceuticals vs. Allied Energy | Lotus Pharmaceuticals vs. Alpha Star Acquisition | Lotus Pharmaceuticals vs. Trimax Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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