Correlation Between NYSE Composite and NGK Insulators
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and NGK Insulators 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 NGK Insulators into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and NGK Insulators, you can compare the effects of market volatilities on NYSE Composite and NGK Insulators 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 NGK Insulators. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and NGK Insulators.
Diversification Opportunities for NYSE Composite and NGK Insulators
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and NGK is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and NGK Insulators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGK Insulators 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 NGK Insulators. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGK Insulators has no effect on the direction of NYSE Composite i.e., NYSE Composite and NGK Insulators go up and down completely randomly.
Pair Corralation between NYSE Composite and NGK Insulators
If you would invest 1,924,339 in NYSE Composite on September 5, 2024 and sell it today you would earn a total of 94,521 from holding NYSE Composite or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. NGK Insulators
Performance |
| Timeline |
NYSE Composite and NGK Insulators Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
NGK Insulators
Pair trading matchups for NGK Insulators
Pair Trading with NYSE Composite and NGK Insulators
The main advantage of trading using opposite NYSE Composite and NGK Insulators positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, NGK Insulators 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 NGK Insulators will offset losses from the drop in NGK Insulators' long position.| NYSE Composite vs. Air Products and | NYSE Composite vs. Playtika Holding Corp | NYSE Composite vs. PepsiCo | NYSE Composite vs. NETGEAR |
| NGK Insulators vs. Dear Cashmere Holding | NGK Insulators vs. Goff Corp | NGK Insulators vs. Wialan Technologies | NGK Insulators vs. Cgrowth Capital |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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