Correlation Between NYSE Composite and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Catalystmillburn 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 Catalystmillburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on NYSE Composite and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Catalystmillburn.
Diversification Opportunities for NYSE Composite and Catalystmillburn
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Catalystmillburn is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of NYSE Composite i.e., NYSE Composite and Catalystmillburn go up and down completely randomly.
Pair Corralation between NYSE Composite and Catalystmillburn
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.15 times more return on investment than Catalystmillburn. However, NYSE Composite is 1.15 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.28 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.03 per unit of risk. If you would invest 1,925,429 in NYSE Composite on November 4, 2024 and sell it today you would earn a total of 74,453 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
NYSE Composite and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Catalystmillburn Hedge Strategy
Pair trading matchups for Catalystmillburn
Pair Trading with NYSE Composite and Catalystmillburn
The main advantage of trading using opposite NYSE Composite and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| Catalystmillburn vs. Lebenthal Lisanti Small | Catalystmillburn vs. Df Dent Small | Catalystmillburn vs. Tax Managed Mid Small | Catalystmillburn vs. Hunter Small Cap |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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