Correlation Between NYSE Composite and Hoya Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Hoya Capital 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 Hoya Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Hoya Capital High, you can compare the effects of market volatilities on NYSE Composite and Hoya Capital 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 Hoya Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Hoya Capital.
Diversification Opportunities for NYSE Composite and Hoya Capital
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Hoya is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Hoya Capital High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Capital High 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 Hoya Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Capital High has no effect on the direction of NYSE Composite i.e., NYSE Composite and Hoya Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Hoya Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.8 times more return on investment than Hoya Capital. However, NYSE Composite is 1.25 times less risky than Hoya Capital. It trades about 0.26 of its potential returns per unit of risk. Hoya Capital High is currently generating about 0.07 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Hoya Capital High
Performance |
| Timeline |
NYSE Composite and Hoya Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Hoya Capital High
Pair trading matchups for Hoya Capital
Pair Trading with NYSE Composite and Hoya Capital
The main advantage of trading using opposite NYSE Composite and Hoya Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Hoya Capital 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 Hoya Capital will offset losses from the drop in Hoya Capital's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| Hoya Capital vs. InfraCap Equity Income | Hoya Capital vs. Virtus InfraCap Preferred | Hoya Capital vs. The Hoya Capital | Hoya Capital vs. Qurate Retail |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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