Correlation Between NYSE Composite and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Meridian Equity 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 Meridian Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Meridian Equity Income, you can compare the effects of market volatilities on NYSE Composite and Meridian Equity 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 Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Meridian Equity.
Diversification Opportunities for NYSE Composite and Meridian Equity
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Meridian is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Meridian Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Equity Income 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 Meridian Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Equity Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Meridian Equity go up and down completely randomly.
Pair Corralation between NYSE Composite and Meridian Equity
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.33 times more return on investment than Meridian Equity. However, NYSE Composite is 1.33 times more volatile than Meridian Equity Income. It trades about 0.27 of its potential returns per unit of risk. Meridian Equity Income is currently generating about 0.14 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Meridian Equity Income
Performance |
| Timeline |
NYSE Composite and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Meridian Equity Income
Pair trading matchups for Meridian Equity
Pair Trading with NYSE Composite and Meridian Equity
The main advantage of trading using opposite NYSE Composite and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Meridian Equity 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 Meridian Equity will offset losses from the drop in Meridian Equity's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Meridian Equity vs. Jpmorgan Hedged Equity | Meridian Equity vs. Jpmorgan Hedged Equity | Meridian Equity vs. Gateway Fund Class | Meridian Equity vs. Gateway Fund Class |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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