Correlation Between NYSE Composite and Global Strategist
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Global Strategist 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 Global Strategist into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Global Strategist Portfolio, you can compare the effects of market volatilities on NYSE Composite and Global Strategist 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 Global Strategist. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Global Strategist.
Diversification Opportunities for NYSE Composite and Global Strategist
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Global is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Global Strategist Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Strategist 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 Global Strategist. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Strategist has no effect on the direction of NYSE Composite i.e., NYSE Composite and Global Strategist go up and down completely randomly.
Pair Corralation between NYSE Composite and Global Strategist
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.39 times more return on investment than Global Strategist. However, NYSE Composite is 1.39 times more volatile than Global Strategist Portfolio. It trades about 0.11 of its potential returns per unit of risk. Global Strategist Portfolio is currently generating about 0.08 per unit of risk. If you would invest 1,539,127 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 482,818 from holding NYSE Composite or generate 31.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Global Strategist Portfolio
Performance |
| Timeline |
NYSE Composite and Global Strategist Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Global Strategist Portfolio
Pair trading matchups for Global Strategist
Pair Trading with NYSE Composite and Global Strategist
The main advantage of trading using opposite NYSE Composite and Global Strategist positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Global Strategist 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 Global Strategist will offset losses from the drop in Global Strategist's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Global Strategist vs. Emerging Markets Equity | Global Strategist vs. Global Fixed Income | Global Strategist vs. Global Fixed Income | Global Strategist vs. Global Fixed Income |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |