Correlation Between NYSE Composite and 1CM
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and 1CM 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 1CM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and 1CM Inc, you can compare the effects of market volatilities on NYSE Composite and 1CM 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 1CM. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and 1CM.
Diversification Opportunities for NYSE Composite and 1CM
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and 1CM is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and 1CM Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1CM Inc 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 1CM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1CM Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and 1CM go up and down completely randomly.
Pair Corralation between NYSE Composite and 1CM
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.14 times more return on investment than 1CM. However, NYSE Composite is 7.22 times less risky than 1CM. It trades about 0.08 of its potential returns per unit of risk. 1CM Inc is currently generating about -0.04 per unit of risk. If you would invest 1,539,994 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 480,988 from holding NYSE Composite or generate 31.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. 1CM Inc
Performance |
| Timeline |
NYSE Composite and 1CM Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
1CM Inc
Pair trading matchups for 1CM
Pair Trading with NYSE Composite and 1CM
The main advantage of trading using opposite NYSE Composite and 1CM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, 1CM 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 1CM will offset losses from the drop in 1CM's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| 1CM vs. Green Cures Botanical | 1CM vs. Cann American Corp | 1CM vs. Rimrock Gold Corp | 1CM vs. Galexxy Holdings |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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