Correlation Between NYSE Composite and SIG Combibloc
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SIG Combibloc 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 SIG Combibloc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SIG Combibloc Group, you can compare the effects of market volatilities on NYSE Composite and SIG Combibloc 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 SIG Combibloc. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SIG Combibloc.
Diversification Opportunities for NYSE Composite and SIG Combibloc
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and SIG is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SIG Combibloc Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIG Combibloc Group 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 SIG Combibloc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIG Combibloc Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and SIG Combibloc go up and down completely randomly.
Pair Corralation between NYSE Composite and SIG Combibloc
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.26 times more return on investment than SIG Combibloc. However, NYSE Composite is 3.91 times less risky than SIG Combibloc. It trades about 0.41 of its potential returns per unit of risk. SIG Combibloc Group is currently generating about -0.25 per unit of risk. If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. SIG Combibloc Group
Performance |
| Timeline |
NYSE Composite and SIG Combibloc Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SIG Combibloc Group
Pair trading matchups for SIG Combibloc
Pair Trading with NYSE Composite and SIG Combibloc
The main advantage of trading using opposite NYSE Composite and SIG Combibloc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SIG Combibloc 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 SIG Combibloc will offset losses from the drop in SIG Combibloc's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| SIG Combibloc vs. Covestro AG | SIG Combibloc vs. Acciona SA | SIG Combibloc vs. Topaz Energy Corp | SIG Combibloc vs. Evonik Industries AG |
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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