Correlation Between NYSE Composite and Lynas Rare
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lynas Rare 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 Lynas Rare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lynas Rare Earths, you can compare the effects of market volatilities on NYSE Composite and Lynas Rare 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 Lynas Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lynas Rare.
Diversification Opportunities for NYSE Composite and Lynas Rare
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Lynas is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lynas Rare Earths in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lynas Rare Earths 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 Lynas Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lynas Rare Earths has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lynas Rare go up and down completely randomly.
Pair Corralation between NYSE Composite and Lynas Rare
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.29 times more return on investment than Lynas Rare. However, NYSE Composite is 3.46 times less risky than Lynas Rare. It trades about 0.07 of its potential returns per unit of risk. Lynas Rare Earths is currently generating about -0.02 per unit of risk. If you would invest 1,599,940 in NYSE Composite on October 25, 2024 and sell it today you would earn a total of 397,938 from holding NYSE Composite or generate 24.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NYSE Composite vs. Lynas Rare Earths
Performance |
| Timeline |
NYSE Composite and Lynas Rare Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lynas Rare Earths
Pair trading matchups for Lynas Rare
Pair Trading with NYSE Composite and Lynas Rare
The main advantage of trading using opposite NYSE Composite and Lynas Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lynas Rare 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 Lynas Rare will offset losses from the drop in Lynas Rare's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. Proficient Auto Logistics, | NYSE Composite vs. Hafnia Limited | NYSE Composite vs. Arm Holdings plc |
| Lynas Rare vs. Aclara Resources | Lynas Rare vs. Anson Resources Limited | Lynas Rare vs. CDN Maverick Capital | Lynas Rare vs. Boliden AB ADR |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |