Correlation Between NYSE Composite and RLI Corp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and RLI Corp 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 RLI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and RLI Corp, you can compare the effects of market volatilities on NYSE Composite and RLI Corp 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 RLI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and RLI Corp.
Diversification Opportunities for NYSE Composite and RLI Corp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and RLI is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and RLI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RLI Corp 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 RLI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RLI Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and RLI Corp go up and down completely randomly.
Pair Corralation between NYSE Composite and RLI Corp
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the RLI Corp. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 1.13 times less risky than RLI Corp. The index trades about -0.33 of its potential returns per unit of risk. The RLI Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 7,448 in RLI Corp on December 14, 2024 and sell it today you would lose (8.00) from holding RLI Corp or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. RLI Corp
Performance |
| Timeline |
NYSE Composite and RLI Corp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
RLI Corp
Pair trading matchups for RLI Corp
Pair Trading with NYSE Composite and RLI Corp
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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