Correlation Between NYSE Composite and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Peninsula Energy 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 Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Peninsula Energy, you can compare the effects of market volatilities on NYSE Composite and Peninsula Energy 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Peninsula Energy.
Diversification Opportunities for NYSE Composite and Peninsula Energy
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Peninsula is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Peninsula Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Peninsula Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 180.81 times less return on investment than Peninsula Energy. But when comparing it to its historical volatility, NYSE Composite is 204.46 times less risky than Peninsula Energy. It trades about 0.14 of its potential returns per unit of risk. Peninsula Energy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6.30 in Peninsula Energy on August 29, 2024 and sell it today you would earn a total of 72.70 from holding Peninsula Energy or generate 1153.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
NYSE Composite vs. Peninsula Energy
Performance |
| Timeline |
NYSE Composite and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Peninsula Energy
Pair trading matchups for Peninsula Energy
Pair Trading with NYSE Composite and Peninsula Energy
The main advantage of trading using opposite NYSE Composite and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Peninsula Energy 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Peninsula Energy vs. Deep Yellow | Peninsula Energy vs. Baselode Energy Corp | Peninsula Energy vs. Paladin Energy | Peninsula Energy vs. Elevate Uranium |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |