Correlation Between NYSE Composite and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Sachem 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 Sachem 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 Sachem Capital Corp, you can compare the effects of market volatilities on NYSE Composite and Sachem 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 Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sachem Capital.
Diversification Opportunities for NYSE Composite and Sachem Capital
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Sachem is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital 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 Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Sachem Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Sachem Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.07 times more return on investment than Sachem Capital. However, NYSE Composite is 2.07 times more volatile than Sachem Capital Corp. It trades about 0.14 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.12 per unit of risk. If you would invest 1,613,685 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 413,519 from holding NYSE Composite or generate 25.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Sachem Capital Corp
Performance |
| Timeline |
NYSE Composite and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sachem Capital Corp
Pair trading matchups for Sachem Capital
Pair Trading with NYSE Composite and Sachem Capital
The main advantage of trading using opposite NYSE Composite and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Sachem 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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