Correlation Between NYSE Composite and Patriot National
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Patriot National 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 Patriot National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Patriot National Bancorp, you can compare the effects of market volatilities on NYSE Composite and Patriot National 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 Patriot National. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Patriot National.
Diversification Opportunities for NYSE Composite and Patriot National
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Patriot is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Patriot National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patriot National Bancorp 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 Patriot National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patriot National Bancorp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Patriot National go up and down completely randomly.
Pair Corralation between NYSE Composite and Patriot National
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.15 times more return on investment than Patriot National. However, NYSE Composite is 6.71 times less risky than Patriot National. It trades about 0.08 of its potential returns per unit of risk. Patriot National Bancorp 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 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 | Insignificant |
| Accuracy | 96.57% |
| Values | Daily Returns |
NYSE Composite vs. Patriot National Bancorp
Performance |
| Timeline |
NYSE Composite and Patriot National Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Patriot National Bancorp
Pair trading matchups for Patriot National
Pair Trading with NYSE Composite and Patriot National
The main advantage of trading using opposite NYSE Composite and Patriot National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Patriot National 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 Patriot National will offset losses from the drop in Patriot National's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Patriot National vs. Citizens Bancorp Investment | Patriot National vs. First Keystone Corp | Patriot National vs. Greenville Federal Financial | Patriot National vs. Oak Ridge Financial |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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