Correlation Between NYSE Composite and Schwartz Value
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Schwartz Value 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 Schwartz Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Schwartz Value Focused, you can compare the effects of market volatilities on NYSE Composite and Schwartz Value 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 Schwartz Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Schwartz Value.
Diversification Opportunities for NYSE Composite and Schwartz Value
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Schwartz is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Schwartz Value Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwartz Value Focused 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 Schwartz Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwartz Value Focused has no effect on the direction of NYSE Composite i.e., NYSE Composite and Schwartz Value go up and down completely randomly.
Pair Corralation between NYSE Composite and Schwartz Value
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.78 times less return on investment than Schwartz Value. But when comparing it to its historical volatility, NYSE Composite is 1.93 times less risky than Schwartz Value. It trades about 0.16 of its potential returns per unit of risk. Schwartz Value Focused is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,460 in Schwartz Value Focused on September 1, 2024 and sell it today you would earn a total of 2,701 from holding Schwartz Value Focused or generate 60.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Schwartz Value Focused
Performance |
| Timeline |
NYSE Composite and Schwartz Value Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Schwartz Value Focused
Pair trading matchups for Schwartz Value
Pair Trading with NYSE Composite and Schwartz Value
The main advantage of trading using opposite NYSE Composite and Schwartz Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Schwartz Value 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 Schwartz Value will offset losses from the drop in Schwartz Value's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Schwartz Value vs. Kinetics Small Cap | Schwartz Value vs. Ave Maria Value | Schwartz Value vs. Kinetics Market Opportunities | Schwartz Value vs. Ave Maria Rising |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |