Correlation Between NYSE Composite and SC
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SC 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 SC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SC, you can compare the effects of market volatilities on NYSE Composite and SC 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 SC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SC.
Diversification Opportunities for NYSE Composite and SC
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and SC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC 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 SC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC has no effect on the direction of NYSE Composite i.e., NYSE Composite and SC go up and down completely randomly.
Pair Corralation between NYSE Composite and SC
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.15 times more return on investment than SC. However, NYSE Composite is 6.69 times less risky than SC. It trades about 0.21 of its potential returns per unit of risk. SC is currently generating about -0.39 per unit of risk. If you would invest 1,960,737 in NYSE Composite on November 18, 2024 and sell it today you would earn a total of 52,312 from holding NYSE Composite or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. SC
Performance |
| Timeline |
NYSE Composite and SC Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SC
Pair trading matchups for SC
Pair Trading with NYSE Composite and SC
The main advantage of trading using opposite NYSE Composite and SC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SC 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 SC will offset losses from the drop in SC's long position.| NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Allied Gaming Entertainment | NYSE Composite vs. Asure Software | NYSE Composite vs. SohuCom |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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