Correlation Between NYSE Composite and Mechel OAO
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mechel OAO 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 Mechel OAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mechel OAO, you can compare the effects of market volatilities on NYSE Composite and Mechel OAO 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 Mechel OAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mechel OAO.
Diversification Opportunities for NYSE Composite and Mechel OAO
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Mechel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mechel OAO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mechel OAO 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 Mechel OAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mechel OAO has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mechel OAO go up and down completely randomly.
Pair Corralation between NYSE Composite and Mechel OAO
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.03 times more return on investment than Mechel OAO. However, NYSE Composite is 36.45 times less risky than Mechel OAO. It trades about 0.08 of its potential returns per unit of risk. Mechel OAO is currently generating about -0.27 per unit of risk. If you would invest 1,556,254 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 465,068 from holding NYSE Composite or generate 29.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 2.83% |
| Values | Daily Returns |
NYSE Composite vs. Mechel OAO
Performance |
| Timeline |
NYSE Composite and Mechel OAO Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mechel OAO
Pair trading matchups for Mechel OAO
Pair Trading with NYSE Composite and Mechel OAO
The main advantage of trading using opposite NYSE Composite and Mechel OAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mechel OAO 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 Mechel OAO will offset losses from the drop in Mechel OAO's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Mechel OAO vs. Emerson Radio | Mechel OAO vs. Hasbro Inc | Mechel OAO vs. Mills Music Trust | Mechel OAO vs. Canlan Ice Sports |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |