Correlation Between NYSE Composite and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Strategic Asset 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 Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Strategic Asset Management, you can compare the effects of market volatilities on NYSE Composite and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Strategic Asset.
Diversification Opportunities for NYSE Composite and Strategic Asset
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Strategic is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of NYSE Composite i.e., NYSE Composite and Strategic Asset go up and down completely randomly.
Pair Corralation between NYSE Composite and Strategic Asset
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Strategic Asset. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 1.04 times less risky than Strategic Asset. The index trades about -0.01 of its potential returns per unit of risk. The Strategic Asset Management is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,342 in Strategic Asset Management on September 13, 2024 and sell it today you would earn a total of 58.00 from holding Strategic Asset Management or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
NYSE Composite vs. Strategic Asset Management
Performance |
| Timeline |
NYSE Composite and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Strategic Asset Management
Pair trading matchups for Strategic Asset
Pair Trading with NYSE Composite and Strategic Asset
The main advantage of trading using opposite NYSE Composite and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| NYSE Composite vs. Boston Beer | NYSE Composite vs. Freedom Bank of | NYSE Composite vs. KeyCorp | NYSE Composite vs. LithiumBank Resources Corp |
| Strategic Asset vs. Pax High Yield | Strategic Asset vs. Virtus High Yield | Strategic Asset vs. Artisan High Income | Strategic Asset vs. Jpmorgan High Yield |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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