Correlation Between NYSE Composite and Invesco Agriculture
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Invesco Agriculture 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 Invesco Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Invesco Agriculture Commodity, you can compare the effects of market volatilities on NYSE Composite and Invesco Agriculture 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 Invesco Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Invesco Agriculture.
Diversification Opportunities for NYSE Composite and Invesco Agriculture
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Invesco is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Invesco Agriculture Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Agriculture 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 Invesco Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Agriculture has no effect on the direction of NYSE Composite i.e., NYSE Composite and Invesco Agriculture go up and down completely randomly.
Pair Corralation between NYSE Composite and Invesco Agriculture
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.61 times more return on investment than Invesco Agriculture. However, NYSE Composite is 1.64 times less risky than Invesco Agriculture. It trades about 0.16 of its potential returns per unit of risk. Invesco Agriculture Commodity is currently generating about 0.08 per unit of risk. If you would invest 1,544,050 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 483,154 from holding NYSE Composite or generate 31.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Invesco Agriculture Commodity
Performance |
| Timeline |
NYSE Composite and Invesco Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Invesco Agriculture Commodity
Pair trading matchups for Invesco Agriculture
Pair Trading with NYSE Composite and Invesco Agriculture
The main advantage of trading using opposite NYSE Composite and Invesco Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Invesco Agriculture 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 Invesco Agriculture will offset losses from the drop in Invesco Agriculture's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Invesco Agriculture vs. Listed Funds Trust | Invesco Agriculture vs. Invesco Electric Vehicle | Invesco Agriculture vs. Invesco Optimum Yield | Invesco Agriculture vs. First Trust Global |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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