Correlation Between NYSE Composite and Postal Savings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Postal Savings 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 Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Postal Savings Bank, you can compare the effects of market volatilities on NYSE Composite and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Postal Savings.
Diversification Opportunities for NYSE Composite and Postal Savings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Postal is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of NYSE Composite i.e., NYSE Composite and Postal Savings go up and down completely randomly.
Pair Corralation between NYSE Composite and Postal Savings
If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 37,406 from holding NYSE Composite or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Postal Savings Bank
Performance |
| Timeline |
NYSE Composite and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Postal Savings Bank
Pair trading matchups for Postal Savings
Pair Trading with NYSE Composite and Postal Savings
The main advantage of trading using opposite NYSE Composite and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Postal Savings vs. China Merchants Bank | Postal Savings vs. China Merchants Bank | Postal Savings vs. Community West Bancshares | Postal Savings vs. China Everbright Bank |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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