Correlation Between NYSE Composite and RiverNorth Managed
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and RiverNorth Managed 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 RiverNorth Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and RiverNorth Managed Duration, you can compare the effects of market volatilities on NYSE Composite and RiverNorth Managed 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 RiverNorth Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and RiverNorth Managed.
Diversification Opportunities for NYSE Composite and RiverNorth Managed
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and RiverNorth is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and RiverNorth Managed Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Managed 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 RiverNorth Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Managed has no effect on the direction of NYSE Composite i.e., NYSE Composite and RiverNorth Managed go up and down completely randomly.
Pair Corralation between NYSE Composite and RiverNorth Managed
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.79 times more return on investment than RiverNorth Managed. However, NYSE Composite is 1.27 times less risky than RiverNorth Managed. It trades about 0.09 of its potential returns per unit of risk. RiverNorth Managed Duration is currently generating about 0.03 per unit of risk. If you would invest 1,635,651 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 376,694 from holding NYSE Composite or generate 23.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. RiverNorth Managed Duration
Performance |
| Timeline |
NYSE Composite and RiverNorth Managed Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
RiverNorth Managed Duration
Pair trading matchups for RiverNorth Managed
Pair Trading with NYSE Composite and RiverNorth Managed
The main advantage of trading using opposite NYSE Composite and RiverNorth Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, RiverNorth Managed 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 RiverNorth Managed will offset losses from the drop in RiverNorth Managed's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| RiverNorth Managed vs. MFS High Income | RiverNorth Managed vs. MFS Investment Grade | RiverNorth Managed vs. Eaton Vance National | RiverNorth Managed vs. Invesco High Income |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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