Correlation Between NYSE Composite and Northern Graphite
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Northern Graphite 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 Northern Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Northern Graphite, you can compare the effects of market volatilities on NYSE Composite and Northern Graphite 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 Northern Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Northern Graphite.
Diversification Opportunities for NYSE Composite and Northern Graphite
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Northern is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Northern Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Graphite 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 Northern Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Graphite has no effect on the direction of NYSE Composite i.e., NYSE Composite and Northern Graphite go up and down completely randomly.
Pair Corralation between NYSE Composite and Northern Graphite
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.1 times more return on investment than Northern Graphite. However, NYSE Composite is 10.22 times less risky than Northern Graphite. It trades about 0.32 of its potential returns per unit of risk. Northern Graphite is currently generating about -0.1 per unit of risk. If you would invest 1,924,074 in NYSE Composite on November 9, 2024 and sell it today you would earn a total of 91,684 from holding NYSE Composite or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Northern Graphite
Performance |
| Timeline |
NYSE Composite and Northern Graphite Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Northern Graphite
Pair trading matchups for Northern Graphite
Pair Trading with NYSE Composite and Northern Graphite
The main advantage of trading using opposite NYSE Composite and Northern Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Northern Graphite 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 Northern Graphite will offset losses from the drop in Northern Graphite's long position.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| Northern Graphite vs. Focus Graphite | Northern Graphite vs. Mason Graphite | Northern Graphite vs. Graphite One | Northern Graphite vs. Syrah Resources Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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