Correlation Between NYSE Composite and The Merger
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and The Merger 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 The Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and The Merger Fund, you can compare the effects of market volatilities on NYSE Composite and The Merger 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 The Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and The Merger.
Diversification Opportunities for NYSE Composite and The Merger
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and The is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and The Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merger Fund 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 The Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merger Fund has no effect on the direction of NYSE Composite i.e., NYSE Composite and The Merger go up and down completely randomly.
Pair Corralation between NYSE Composite and The Merger
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.23 times more return on investment than The Merger. However, NYSE Composite is 4.23 times more volatile than The Merger Fund. It trades about 0.12 of its potential returns per unit of risk. The Merger Fund is currently generating about 0.07 per unit of risk. If you would invest 1,711,558 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 310,387 from holding NYSE Composite or generate 18.13% 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. The Merger Fund
Performance |
| Timeline |
NYSE Composite and The Merger Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
The Merger Fund
Pair trading matchups for The Merger
Pair Trading with NYSE Composite and The Merger
The main advantage of trading using opposite NYSE Composite and The Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, The Merger 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 The Merger will offset losses from the drop in The Merger's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| The Merger vs. Strategic Advisers International | The Merger vs. Strategic Advisers Income | The Merger vs. Strategic Advisers E | The Merger vs. Strategic Advisers Emerging |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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