Correlation Between NYSE Composite and Polymeric Resources
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Polymeric Resources 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 Polymeric Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Polymeric Resources, you can compare the effects of market volatilities on NYSE Composite and Polymeric Resources 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 Polymeric Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Polymeric Resources.
Diversification Opportunities for NYSE Composite and Polymeric Resources
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Polymeric is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Polymeric Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polymeric Resources 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 Polymeric Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polymeric Resources has no effect on the direction of NYSE Composite i.e., NYSE Composite and Polymeric Resources go up and down completely randomly.
Pair Corralation between NYSE Composite and Polymeric Resources
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.36 times more return on investment than Polymeric Resources. However, NYSE Composite is 2.78 times less risky than Polymeric Resources. It trades about 0.08 of its potential returns per unit of risk. Polymeric Resources is currently generating about -0.04 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 465,068 from holding NYSE Composite or generate 29.88% 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. Polymeric Resources
Performance |
| Timeline |
NYSE Composite and Polymeric Resources Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Polymeric Resources
Pair trading matchups for Polymeric Resources
Pair Trading with NYSE Composite and Polymeric Resources
The main advantage of trading using opposite NYSE Composite and Polymeric Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Polymeric Resources 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 Polymeric Resources will offset losses from the drop in Polymeric Resources' long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Polymeric Resources vs. Haydale Graphene Industries | Polymeric Resources vs. Versarien plc | Polymeric Resources vs. NanoXplore | Polymeric Resources vs. G6 Materials Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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