Correlation Between NYSE Composite and Mustang Bio
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mustang Bio 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 Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mustang Bio, you can compare the effects of market volatilities on NYSE Composite and Mustang Bio 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 Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mustang Bio.
Diversification Opportunities for NYSE Composite and Mustang Bio
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Mustang is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio 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 Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mustang Bio go up and down completely randomly.
Pair Corralation between NYSE Composite and Mustang Bio
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.06 times more return on investment than Mustang Bio. However, NYSE Composite is 17.69 times less risky than Mustang Bio. It trades about 0.33 of its potential returns per unit of risk. Mustang Bio is currently generating about -0.28 per unit of risk. If you would invest 1,909,542 in NYSE Composite on November 3, 2024 and sell it today you would earn a total of 90,340 from holding NYSE Composite or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Mustang Bio
Performance |
| Timeline |
NYSE Composite and Mustang Bio Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mustang Bio
Pair trading matchups for Mustang Bio
Pair Trading with NYSE Composite and Mustang Bio
The main advantage of trading using opposite NYSE Composite and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mustang Bio 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.| NYSE Composite vs. Palomar Holdings | NYSE Composite vs. The Peoples Insurance | NYSE Composite vs. Radian Group | NYSE Composite vs. Nascent Wine |
| Mustang Bio vs. Checkpoint Therapeutics | Mustang Bio vs. Reviva Pharmaceuticals Holdings | Mustang Bio vs. Fortress Biotech Pref | Mustang Bio vs. Kodiak Sciences |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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