Correlation Between NYSE Composite and Leisure Fund
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Leisure Fund 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 Leisure Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Leisure Fund Investor, you can compare the effects of market volatilities on NYSE Composite and Leisure Fund 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 Leisure Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Leisure Fund.
Diversification Opportunities for NYSE Composite and Leisure Fund
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Leisure is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Leisure Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leisure Fund Investor 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 Leisure Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leisure Fund Investor has no effect on the direction of NYSE Composite i.e., NYSE Composite and Leisure Fund go up and down completely randomly.
Pair Corralation between NYSE Composite and Leisure Fund
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.37 times less return on investment than Leisure Fund. But when comparing it to its historical volatility, NYSE Composite is 1.31 times less risky than Leisure Fund. It trades about 0.08 of its potential returns per unit of risk. Leisure Fund Investor is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,022 in Leisure Fund Investor on September 3, 2024 and sell it today you would earn a total of 2,770 from holding Leisure Fund Investor or generate 39.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Leisure Fund Investor
Performance |
| Timeline |
NYSE Composite and Leisure Fund Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Leisure Fund Investor
Pair trading matchups for Leisure Fund
Pair Trading with NYSE Composite and Leisure Fund
The main advantage of trading using opposite NYSE Composite and Leisure Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Leisure Fund 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 Leisure Fund will offset losses from the drop in Leisure Fund's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Leisure Fund vs. Retailing Fund Investor | Leisure Fund vs. Financial Services Fund | Leisure Fund vs. Banking Fund Investor | Leisure Fund vs. Health Care Fund |
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 Stocks Directory module to find actively traded stocks across global markets.
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