Correlation Between NYSE Composite and Douglas Dynamics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Douglas Dynamics 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 Douglas Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Douglas Dynamics, you can compare the effects of market volatilities on NYSE Composite and Douglas Dynamics 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 Douglas Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Douglas Dynamics.
Diversification Opportunities for NYSE Composite and Douglas Dynamics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Douglas is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Douglas Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Dynamics 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 Douglas Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Dynamics has no effect on the direction of NYSE Composite i.e., NYSE Composite and Douglas Dynamics go up and down completely randomly.
Pair Corralation between NYSE Composite and Douglas Dynamics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.76 times less return on investment than Douglas Dynamics. But when comparing it to its historical volatility, NYSE Composite is 3.59 times less risky than Douglas Dynamics. It trades about 0.29 of its potential returns per unit of risk. Douglas Dynamics is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,306 in Douglas Dynamics on August 31, 2024 and sell it today you would earn a total of 258.00 from holding Douglas Dynamics or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Douglas Dynamics
Performance |
| Timeline |
NYSE Composite and Douglas Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Douglas Dynamics
Pair trading matchups for Douglas Dynamics
Pair Trading with NYSE Composite and Douglas Dynamics
The main advantage of trading using opposite NYSE Composite and Douglas Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Douglas Dynamics 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 Douglas Dynamics will offset losses from the drop in Douglas Dynamics' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Douglas Dynamics vs. Foresight Autonomous Holdings | Douglas Dynamics vs. Hyliion Holdings Corp | Douglas Dynamics vs. American Axle Manufacturing | Douglas Dynamics vs. Gentex |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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