Correlation Between NYSE Composite and PAX Global
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and PAX Global 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 PAX Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and PAX Global Technology, you can compare the effects of market volatilities on NYSE Composite and PAX Global 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 PAX Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and PAX Global.
Diversification Opportunities for NYSE Composite and PAX Global
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and PAX is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and PAX Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAX Global Technology 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 PAX Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAX Global Technology has no effect on the direction of NYSE Composite i.e., NYSE Composite and PAX Global go up and down completely randomly.
Pair Corralation between NYSE Composite and PAX Global
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.35 times more return on investment than PAX Global. However, NYSE Composite is 2.83 times less risky than PAX Global. It trades about 0.41 of its potential returns per unit of risk. PAX Global Technology is currently generating about -0.2 per unit of risk. If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. PAX Global Technology
Performance |
| Timeline |
NYSE Composite and PAX Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
PAX Global Technology
Pair trading matchups for PAX Global
Pair Trading with NYSE Composite and PAX Global
The main advantage of trading using opposite NYSE Composite and PAX Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, PAX Global 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 PAX Global will offset losses from the drop in PAX Global's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| PAX Global vs. Ricoh Company | PAX Global vs. FactSet Research Systems | PAX Global vs. Palantir Technologies Class | PAX Global vs. Barnes Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |