Correlation Between NYSE Composite and Shenkman Short
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Shenkman Short 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 Shenkman Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Shenkman Short Duration, you can compare the effects of market volatilities on NYSE Composite and Shenkman Short 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 Shenkman Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Shenkman Short.
Diversification Opportunities for NYSE Composite and Shenkman Short
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Shenkman is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Shenkman Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Short Duration 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 Shenkman Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Short Duration has no effect on the direction of NYSE Composite i.e., NYSE Composite and Shenkman Short go up and down completely randomly.
Pair Corralation between NYSE Composite and Shenkman Short
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.78 times more return on investment than Shenkman Short. However, NYSE Composite is 4.78 times more volatile than Shenkman Short Duration. It trades about 0.28 of its potential returns per unit of risk. Shenkman Short Duration is currently generating about 0.14 per unit of risk. If you would invest 1,925,429 in NYSE Composite on November 4, 2024 and sell it today you would earn a total of 74,453 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Shenkman Short Duration
Performance |
| Timeline |
NYSE Composite and Shenkman Short Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Shenkman Short Duration
Pair trading matchups for Shenkman Short
Pair Trading with NYSE Composite and Shenkman Short
The main advantage of trading using opposite NYSE Composite and Shenkman Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Shenkman Short 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 Shenkman Short will offset losses from the drop in Shenkman Short's long position.| NYSE Composite vs. Aris Water Solutions | NYSE Composite vs. Marfrig Global Foods | NYSE Composite vs. CenterPoint Energy | NYSE Composite vs. Sysco |
| Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Floating Rate |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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