Correlation Between NYSE Composite and Nathans Famous
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Nathans Famous 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 Nathans Famous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nathans Famous, you can compare the effects of market volatilities on NYSE Composite and Nathans Famous 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 Nathans Famous. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nathans Famous.
Diversification Opportunities for NYSE Composite and Nathans Famous
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Nathans is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nathans Famous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nathans Famous 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 Nathans Famous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nathans Famous has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nathans Famous go up and down completely randomly.
Pair Corralation between NYSE Composite and Nathans Famous
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.29 times more return on investment than Nathans Famous. However, NYSE Composite is 3.45 times less risky than Nathans Famous. It trades about 0.24 of its potential returns per unit of risk. Nathans Famous is currently generating about 0.02 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nathans Famous
Performance |
| Timeline |
NYSE Composite and Nathans Famous Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nathans Famous
Pair trading matchups for Nathans Famous
Pair Trading with NYSE Composite and Nathans Famous
The main advantage of trading using opposite NYSE Composite and Nathans Famous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Nathans Famous 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 Nathans Famous will offset losses from the drop in Nathans Famous' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Nathans Famous vs. Noble Romans | Nathans Famous vs. Good Times Restaurants | Nathans Famous vs. Bagger Daves Burger | Nathans Famous vs. Flanigans Enterprises |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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