Correlation Between NYSE Composite and Europe 125x
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Europe 125x 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 Europe 125x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Europe 125x Strategy, you can compare the effects of market volatilities on NYSE Composite and Europe 125x 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 Europe 125x. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Europe 125x.
Diversification Opportunities for NYSE Composite and Europe 125x
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Europe is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Europe 125x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europe 125x Strategy 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 Europe 125x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europe 125x Strategy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Europe 125x go up and down completely randomly.
Pair Corralation between NYSE Composite and Europe 125x
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.62 times more return on investment than Europe 125x. However, NYSE Composite is 1.6 times less risky than Europe 125x. It trades about 0.15 of its potential returns per unit of risk. Europe 125x Strategy is currently generating about -0.06 per unit of risk. If you would invest 1,785,236 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 236,800 from holding NYSE Composite or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Europe 125x Strategy
Performance |
| Timeline |
NYSE Composite and Europe 125x Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Europe 125x Strategy
Pair trading matchups for Europe 125x
Pair Trading with NYSE Composite and Europe 125x
The main advantage of trading using opposite NYSE Composite and Europe 125x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Europe 125x 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 Europe 125x will offset losses from the drop in Europe 125x's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Europe 125x vs. Sp 500 2x | Europe 125x vs. Inverse Dow 2x | Europe 125x vs. Nasdaq 100 2x Strategy | Europe 125x vs. Russell 2000 2x |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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