Correlation Between NYSE Composite and Old Westbury
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Old Westbury 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 Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Old Westbury California, you can compare the effects of market volatilities on NYSE Composite and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Old Westbury.
Diversification Opportunities for NYSE Composite and Old Westbury
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Old is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Old Westbury California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury California 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury California has no effect on the direction of NYSE Composite i.e., NYSE Composite and Old Westbury go up and down completely randomly.
Pair Corralation between NYSE Composite and Old Westbury
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.51 times more return on investment than Old Westbury. However, NYSE Composite is 3.51 times more volatile than Old Westbury California. It trades about 0.17 of its potential returns per unit of risk. Old Westbury California is currently generating about 0.05 per unit of risk. If you would invest 1,901,742 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 125,462 from holding NYSE Composite or generate 6.6% 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. Old Westbury California
Performance |
| Timeline |
NYSE Composite and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Old Westbury California
Pair trading matchups for Old Westbury
Pair Trading with NYSE Composite and Old Westbury
The main advantage of trading using opposite NYSE Composite and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed | Old Westbury vs. Old Westbury Large |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |