Correlation Between NYSE Composite and Neo Performance
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Neo Performance 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 Neo Performance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Neo Performance Materials, you can compare the effects of market volatilities on NYSE Composite and Neo Performance 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 Neo Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Neo Performance.
Diversification Opportunities for NYSE Composite and Neo Performance
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Neo is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Neo Performance Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Performance Materials 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 Neo Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Performance Materials has no effect on the direction of NYSE Composite i.e., NYSE Composite and Neo Performance go up and down completely randomly.
Pair Corralation between NYSE Composite and Neo Performance
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.27 times more return on investment than Neo Performance. However, NYSE Composite is 3.77 times less risky than Neo Performance. It trades about 0.11 of its potential returns per unit of risk. Neo Performance Materials is currently generating about 0.01 per unit of risk. If you would invest 1,511,767 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 500,578 from holding NYSE Composite or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
NYSE Composite vs. Neo Performance Materials
Performance |
| Timeline |
NYSE Composite and Neo Performance Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Neo Performance Materials
Pair trading matchups for Neo Performance
Pair Trading with NYSE Composite and Neo Performance
The main advantage of trading using opposite NYSE Composite and Neo Performance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Neo Performance 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 Neo Performance will offset losses from the drop in Neo Performance's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Neo Performance vs. Mativ Holdings | Neo Performance vs. Sensient Technologies | Neo Performance vs. Koppers Holdings | Neo Performance vs. Axalta Coating Systems |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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