Correlation Between NYSE Composite and Stocksplus
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Stocksplus 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 Stocksplus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stocksplus Tr Short, you can compare the effects of market volatilities on NYSE Composite and Stocksplus 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 Stocksplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stocksplus.
Diversification Opportunities for NYSE Composite and Stocksplus
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Stocksplus is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Stocksplus Tr Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stocksplus Tr Short 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 Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stocksplus Tr Short has no effect on the direction of NYSE Composite i.e., NYSE Composite and Stocksplus go up and down completely randomly.
Pair Corralation between NYSE Composite and Stocksplus
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.87 times more return on investment than Stocksplus. However, NYSE Composite is 1.15 times less risky than Stocksplus. It trades about 0.11 of its potential returns per unit of risk. Stocksplus Tr Short is currently generating about -0.07 per unit of risk. If you would invest 1,766,949 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 260,255 from holding NYSE Composite or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
NYSE Composite vs. Stocksplus Tr Short
Performance |
| Timeline |
NYSE Composite and Stocksplus Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stocksplus Tr Short
Pair trading matchups for Stocksplus
Pair Trading with NYSE Composite and Stocksplus
The main advantage of trading using opposite NYSE Composite and Stocksplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Stocksplus 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 Stocksplus will offset losses from the drop in Stocksplus' long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Stocksplus vs. Jhancock Disciplined Value | Stocksplus vs. Americafirst Large Cap | Stocksplus vs. Touchstone Large Cap | Stocksplus vs. Transamerica Large Cap |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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