Correlation Between NYSE Composite and ATRenew
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and ATRenew 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 ATRenew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ATRenew Inc DRC, you can compare the effects of market volatilities on NYSE Composite and ATRenew 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 ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ATRenew.
Diversification Opportunities for NYSE Composite and ATRenew
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and ATRenew is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC 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 ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of NYSE Composite i.e., NYSE Composite and ATRenew go up and down completely randomly.
Pair Corralation between NYSE Composite and ATRenew
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.6 times less return on investment than ATRenew. But when comparing it to its historical volatility, NYSE Composite is 6.35 times less risky than ATRenew. It trades about 0.07 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 305.00 in ATRenew Inc DRC on November 2, 2024 and sell it today you would lose (35.50) from holding ATRenew Inc DRC or give up 11.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
NYSE Composite vs. ATRenew Inc DRC
Performance |
| Timeline |
NYSE Composite and ATRenew Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ATRenew Inc DRC
Pair trading matchups for ATRenew
Pair Trading with NYSE Composite and ATRenew
The main advantage of trading using opposite NYSE Composite and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.| NYSE Composite vs. Palomar Holdings | NYSE Composite vs. The Peoples Insurance | NYSE Composite vs. Radian Group | NYSE Composite vs. Nascent Wine |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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