Correlation Between NYSE Composite and PING
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and PING 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 PING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and PING, you can compare the effects of market volatilities on NYSE Composite and PING 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 PING. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and PING.
Diversification Opportunities for NYSE Composite and PING
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and PING is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and PING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PING 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 PING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PING has no effect on the direction of NYSE Composite i.e., NYSE Composite and PING go up and down completely randomly.
Pair Corralation between NYSE Composite and PING
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.94 times less return on investment than PING. But when comparing it to its historical volatility, NYSE Composite is 3.97 times less risky than PING. It trades about 0.07 of its potential returns per unit of risk. PING is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3.28 in PING on August 24, 2024 and sell it today you would earn a total of 2.44 from holding PING or generate 74.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 33.54% |
| Values | Daily Returns |
NYSE Composite vs. PING
Performance |
| Timeline |
NYSE Composite and PING Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
PING
Pair trading matchups for PING
Pair Trading with NYSE Composite and PING
The main advantage of trading using opposite NYSE Composite and PING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, PING 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 PING will offset losses from the drop in PING's long position.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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