Correlation Between NYSE Composite and Neptune Wellness
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Neptune Wellness 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 Neptune Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Neptune Wellness Solutions, you can compare the effects of market volatilities on NYSE Composite and Neptune Wellness 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 Neptune Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Neptune Wellness.
Diversification Opportunities for NYSE Composite and Neptune Wellness
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Neptune is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Neptune Wellness Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neptune Wellness Sol 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 Neptune Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neptune Wellness Sol has no effect on the direction of NYSE Composite i.e., NYSE Composite and Neptune Wellness go up and down completely randomly.
Pair Corralation between NYSE Composite and Neptune Wellness
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.08 times more return on investment than Neptune Wellness. However, NYSE Composite is 13.24 times less risky than Neptune Wellness. It trades about 0.08 of its potential returns per unit of risk. Neptune Wellness Solutions is currently generating about -0.06 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 464,866 from holding NYSE Composite or generate 30.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.79% |
| Values | Daily Returns |
NYSE Composite vs. Neptune Wellness Solutions
Performance |
| Timeline |
NYSE Composite and Neptune Wellness Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Neptune Wellness Solutions
Pair trading matchups for Neptune Wellness
Pair Trading with NYSE Composite and Neptune Wellness
The main advantage of trading using opposite NYSE Composite and Neptune Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Neptune Wellness 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 Neptune Wellness will offset losses from the drop in Neptune Wellness' long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Neptune Wellness vs. Alpha Teknova | Neptune Wellness vs. Phibro Animal Health | Neptune Wellness vs. China Pharma Holdings | Neptune Wellness vs. Universe Pharmaceuticals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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