Correlation Between NYSE Composite and Newcore Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Newcore Gold 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 Newcore Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Newcore Gold, you can compare the effects of market volatilities on NYSE Composite and Newcore Gold 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 Newcore Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Newcore Gold.
Diversification Opportunities for NYSE Composite and Newcore Gold
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Newcore is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore Gold 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 Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of NYSE Composite i.e., NYSE Composite and Newcore Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and Newcore Gold
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.8 times less return on investment than Newcore Gold. But when comparing it to its historical volatility, NYSE Composite is 7.55 times less risky than Newcore Gold. It trades about 0.11 of its potential returns per unit of risk. Newcore Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Newcore Gold on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Newcore Gold or generate 76.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Newcore Gold
Performance |
| Timeline |
NYSE Composite and Newcore Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Newcore Gold
Pair trading matchups for Newcore Gold
Pair Trading with NYSE Composite and Newcore Gold
The main advantage of trading using opposite NYSE Composite and Newcore Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Newcore Gold 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 Newcore Gold will offset losses from the drop in Newcore Gold's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Newcore Gold vs. Aurion Resources | Newcore Gold vs. Rio2 Limited | Newcore Gold vs. Palamina Corp | Newcore Gold vs. BTU Metals Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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