Correlation Between NYSE Composite and Pangaea Logistic
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Pangaea Logistic 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 Pangaea Logistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Pangaea Logistic, you can compare the effects of market volatilities on NYSE Composite and Pangaea Logistic 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 Pangaea Logistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pangaea Logistic.
Diversification Opportunities for NYSE Composite and Pangaea Logistic
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Pangaea is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pangaea Logistic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pangaea Logistic 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 Pangaea Logistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pangaea Logistic has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pangaea Logistic go up and down completely randomly.
Pair Corralation between NYSE Composite and Pangaea Logistic
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.27 times more return on investment than Pangaea Logistic. However, NYSE Composite is 3.69 times less risky than Pangaea Logistic. It trades about 0.13 of its potential returns per unit of risk. Pangaea Logistic is currently generating about -0.06 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 37,406 from holding NYSE Composite or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Pangaea Logistic
Performance |
| Timeline |
NYSE Composite and Pangaea Logistic Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pangaea Logistic
Pair trading matchups for Pangaea Logistic
Pair Trading with NYSE Composite and Pangaea Logistic
The main advantage of trading using opposite NYSE Composite and Pangaea Logistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Pangaea Logistic 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 Pangaea Logistic will offset losses from the drop in Pangaea Logistic's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Pangaea Logistic vs. EuroDry | Pangaea Logistic vs. Costamare | Pangaea Logistic vs. Global Ship Lease | Pangaea Logistic vs. Danaos |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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