Correlation Between NYSE Composite and High Yield
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and High Yield 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 High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and High Yield Fund, you can compare the effects of market volatilities on NYSE Composite and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and High Yield.
Diversification Opportunities for NYSE Composite and High Yield
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and High is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and High Yield Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Fund 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Fund has no effect on the direction of NYSE Composite i.e., NYSE Composite and High Yield go up and down completely randomly.
Pair Corralation between NYSE Composite and High Yield
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.44 times more return on investment than High Yield. However, NYSE Composite is 2.44 times more volatile than High Yield Fund. It trades about 0.08 of its potential returns per unit of risk. High Yield Fund is currently generating about 0.1 per unit of risk. If you would invest 1,556,254 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 470,950 from holding NYSE Composite or generate 30.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. High Yield Fund
Performance |
| Timeline |
NYSE Composite and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
High Yield Fund
Pair trading matchups for High Yield
Pair Trading with NYSE Composite and High Yield
The main advantage of trading using opposite NYSE Composite and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| High Yield vs. Baird Smallmid Cap | High Yield vs. The Hartford Small | High Yield vs. Touchstone Small Cap | High Yield vs. Ab Small Cap |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |