Correlation Between NYSE Composite and Natuzzi SpA
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Natuzzi SpA 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 Natuzzi SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Natuzzi SpA, you can compare the effects of market volatilities on NYSE Composite and Natuzzi SpA 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 Natuzzi SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Natuzzi SpA.
Diversification Opportunities for NYSE Composite and Natuzzi SpA
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Natuzzi is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Natuzzi SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natuzzi SpA 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 Natuzzi SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natuzzi SpA has no effect on the direction of NYSE Composite i.e., NYSE Composite and Natuzzi SpA go up and down completely randomly.
Pair Corralation between NYSE Composite and Natuzzi SpA
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.23 times more return on investment than Natuzzi SpA. However, NYSE Composite is 4.34 times less risky than Natuzzi SpA. It trades about 0.21 of its potential returns per unit of risk. Natuzzi SpA is currently generating about -0.01 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
NYSE Composite vs. Natuzzi SpA
Performance |
| Timeline |
NYSE Composite and Natuzzi SpA Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Natuzzi SpA
Pair trading matchups for Natuzzi SpA
Pair Trading with NYSE Composite and Natuzzi SpA
The main advantage of trading using opposite NYSE Composite and Natuzzi SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Natuzzi SpA 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 Natuzzi SpA will offset losses from the drop in Natuzzi SpA's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Natuzzi SpA vs. Willis Lease Finance | Natuzzi SpA vs. Rocky Brands | Natuzzi SpA vs. First Business Financial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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