Correlation Between NYSE Composite and MCAN Mortgage
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and MCAN Mortgage 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 MCAN Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and MCAN Mortgage, you can compare the effects of market volatilities on NYSE Composite and MCAN Mortgage 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 MCAN Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and MCAN Mortgage.
Diversification Opportunities for NYSE Composite and MCAN Mortgage
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and MCAN is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage 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 MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of NYSE Composite i.e., NYSE Composite and MCAN Mortgage go up and down completely randomly.
Pair Corralation between NYSE Composite and MCAN Mortgage
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.42 times more return on investment than MCAN Mortgage. However, NYSE Composite is 2.38 times less risky than MCAN Mortgage. It trades about 0.38 of its potential returns per unit of risk. MCAN Mortgage is currently generating about 0.1 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 96,983 from holding NYSE Composite or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
NYSE Composite vs. MCAN Mortgage
Performance |
| Timeline |
NYSE Composite and MCAN Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
MCAN Mortgage
Pair trading matchups for MCAN Mortgage
Pair Trading with NYSE Composite and MCAN Mortgage
The main advantage of trading using opposite NYSE Composite and MCAN Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, MCAN Mortgage 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 MCAN Mortgage will offset losses from the drop in MCAN Mortgage's long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
| MCAN Mortgage vs. Western Asset Global | MCAN Mortgage vs. Invesco Trust For | MCAN Mortgage vs. Logan Ridge Finance | MCAN Mortgage vs. Invesco Advantage MIT |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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