Correlation Between NYSE Composite and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Growth Strategy 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 Growth Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Growth Strategy Fund, you can compare the effects of market volatilities on NYSE Composite and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Growth Strategy.
Diversification Opportunities for NYSE Composite and Growth Strategy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Growth is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Growth Strategy go up and down completely randomly.
Pair Corralation between NYSE Composite and Growth Strategy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.11 times more return on investment than Growth Strategy. However, NYSE Composite is 1.11 times more volatile than Growth Strategy Fund. It trades about 0.11 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.1 per unit of risk. If you would invest 1,511,767 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 500,578 from holding NYSE Composite or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Growth Strategy Fund
Performance |
| Timeline |
NYSE Composite and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Growth Strategy Fund
Pair trading matchups for Growth Strategy
Pair Trading with NYSE Composite and Growth Strategy
The main advantage of trading using opposite NYSE Composite and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy'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 |
| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |