Correlation Between NYSE Composite and Nationwide Highmark
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Nationwide Highmark 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 Nationwide Highmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nationwide Highmark Small, you can compare the effects of market volatilities on NYSE Composite and Nationwide Highmark 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 Nationwide Highmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nationwide Highmark.
Diversification Opportunities for NYSE Composite and Nationwide Highmark
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Nationwide is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nationwide Highmark Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Highmark Small 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 Nationwide Highmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Highmark Small has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nationwide Highmark go up and down completely randomly.
Pair Corralation between NYSE Composite and Nationwide Highmark
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.71 times more return on investment than Nationwide Highmark. However, NYSE Composite is 1.4 times less risky than Nationwide Highmark. It trades about -0.02 of its potential returns per unit of risk. Nationwide Highmark Small is currently generating about -0.43 per unit of risk. If you would invest 1,998,000 in NYSE Composite on November 28, 2024 and sell it today you would lose (5,595) from holding NYSE Composite or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nationwide Highmark Small
Performance |
| Timeline |
NYSE Composite and Nationwide Highmark Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nationwide Highmark Small
Pair trading matchups for Nationwide Highmark
Pair Trading with NYSE Composite and Nationwide Highmark
The main advantage of trading using opposite NYSE Composite and Nationwide Highmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Nationwide Highmark 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 Nationwide Highmark will offset losses from the drop in Nationwide Highmark's long position.| NYSE Composite vs. Inter Parfums | NYSE Composite vs. Amkor Technology | NYSE Composite vs. Unilever PLC ADR | NYSE Composite vs. Estee Lauder Companies |
| Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Janus Venture Fund | Nationwide Highmark vs. The Hartford Midcap |
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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