Correlation Between NYSE Composite and Outfront Media
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Outfront Media 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 Outfront Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Outfront Media, you can compare the effects of market volatilities on NYSE Composite and Outfront Media 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 Outfront Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Outfront Media.
Diversification Opportunities for NYSE Composite and Outfront Media
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Outfront is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Outfront Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outfront Media 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 Outfront Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outfront Media has no effect on the direction of NYSE Composite i.e., NYSE Composite and Outfront Media go up and down completely randomly.
Pair Corralation between NYSE Composite and Outfront Media
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.54 times less return on investment than Outfront Media. But when comparing it to its historical volatility, NYSE Composite is 3.52 times less risky than Outfront Media. It trades about 0.13 of its potential returns per unit of risk. Outfront Media is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,173 in Outfront Media on August 27, 2024 and sell it today you would earn a total of 740.00 from holding Outfront Media or generate 63.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Outfront Media
Performance |
| Timeline |
NYSE Composite and Outfront Media Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Outfront Media
Pair trading matchups for Outfront Media
Pair Trading with NYSE Composite and Outfront Media
The main advantage of trading using opposite NYSE Composite and Outfront Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Outfront Media 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 Outfront Media will offset losses from the drop in Outfront Media's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Outfront Media vs. Broadstone Net Lease | Outfront Media vs. Armada Hflr Pr | Outfront Media vs. Brightspire Capital | Outfront Media vs. Safehold |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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