Correlation Between NYSE Composite and Steward Large
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Steward Large 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 Steward Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Steward Large Cap, you can compare the effects of market volatilities on NYSE Composite and Steward Large 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 Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Steward Large.
Diversification Opportunities for NYSE Composite and Steward Large
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Steward is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large Cap 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 Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of NYSE Composite i.e., NYSE Composite and Steward Large go up and down completely randomly.
Pair Corralation between NYSE Composite and Steward Large
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.05 times less return on investment than Steward Large. But when comparing it to its historical volatility, NYSE Composite is 1.14 times less risky than Steward Large. It trades about 0.42 of its potential returns per unit of risk. Steward Large Cap is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 3,603 in Steward Large Cap on September 1, 2024 and sell it today you would earn a total of 214.00 from holding Steward Large Cap or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Steward Large Cap
Performance |
| Timeline |
NYSE Composite and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Steward Large Cap
Pair trading matchups for Steward Large
Pair Trading with NYSE Composite and Steward Large
The main advantage of trading using opposite NYSE Composite and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Steward Large 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 Steward Large will offset losses from the drop in Steward Large's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Steward Large vs. Steward Small Mid Cap | Steward Large vs. Steward Global E | Steward Large vs. Buffalo Large Cap | Steward Large vs. Steward Select Bond |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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