Correlation Between NYSE Composite and Aew Real
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aew Real 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 Aew Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aew Real Estate, you can compare the effects of market volatilities on NYSE Composite and Aew Real 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 Aew Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aew Real.
Diversification Opportunities for NYSE Composite and Aew Real
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and AEW is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aew Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aew Real Estate 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 Aew Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aew Real Estate has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aew Real go up and down completely randomly.
Pair Corralation between NYSE Composite and Aew Real
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.74 times more return on investment than Aew Real. However, NYSE Composite is 1.36 times less risky than Aew Real. It trades about 0.08 of its potential returns per unit of risk. Aew Real Estate is currently generating about 0.05 per unit of risk. If you would invest 1,546,867 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 480,337 from holding NYSE Composite or generate 31.05% 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. Aew Real Estate
Performance |
| Timeline |
NYSE Composite and Aew Real Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aew Real Estate
Pair trading matchups for Aew Real
Pair Trading with NYSE Composite and Aew Real
The main advantage of trading using opposite NYSE Composite and Aew Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aew Real 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 Aew Real will offset losses from the drop in Aew Real's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Aew Real vs. Asg Managed Futures | Aew Real vs. Asg Managed Futures | Aew Real vs. Natixis Oakmark | Aew Real vs. Natixis Oakmark International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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