Correlation Between NYSE Composite and Persimmon Plc
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Persimmon Plc 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 Persimmon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Persimmon Plc, you can compare the effects of market volatilities on NYSE Composite and Persimmon Plc 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 Persimmon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Persimmon Plc.
Diversification Opportunities for NYSE Composite and Persimmon Plc
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Persimmon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Persimmon Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Persimmon Plc 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 Persimmon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Persimmon Plc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Persimmon Plc go up and down completely randomly.
Pair Corralation between NYSE Composite and Persimmon Plc
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than Persimmon Plc. However, NYSE Composite is 3.98 times less risky than Persimmon Plc. It trades about 0.19 of its potential returns per unit of risk. Persimmon Plc is currently generating about -0.42 per unit of risk. If you would invest 1,956,073 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 56,272 from holding NYSE Composite or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Persimmon Plc
Performance |
| Timeline |
NYSE Composite and Persimmon Plc Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Persimmon Plc
Pair trading matchups for Persimmon Plc
Pair Trading with NYSE Composite and Persimmon Plc
The main advantage of trading using opposite NYSE Composite and Persimmon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Persimmon Plc 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 Persimmon Plc will offset losses from the drop in Persimmon Plc's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Persimmon Plc vs. Taylor Wimpey plc | Persimmon Plc vs. Barratt Developments PLC | Persimmon Plc vs. Barratt Developments plc | Persimmon Plc vs. Consorcio ARA S |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |