Correlation Between NYSE Composite and SEP Acquisition
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SEP Acquisition 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 SEP Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SEP Acquisition Corp, you can compare the effects of market volatilities on NYSE Composite and SEP Acquisition 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 SEP Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SEP Acquisition.
Diversification Opportunities for NYSE Composite and SEP Acquisition
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and SEP is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SEP Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEP Acquisition 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 SEP Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEP Acquisition Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and SEP Acquisition go up and down completely randomly.
Pair Corralation between NYSE Composite and SEP Acquisition
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.25 times less return on investment than SEP Acquisition. But when comparing it to its historical volatility, NYSE Composite is 6.29 times less risky than SEP Acquisition. It trades about 0.13 of its potential returns per unit of risk. SEP Acquisition Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 975.00 in SEP Acquisition Corp on September 14, 2024 and sell it today you would earn a total of 51.00 from holding SEP Acquisition Corp or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 62.31% |
| Values | Daily Returns |
NYSE Composite vs. SEP Acquisition Corp
Performance |
| Timeline |
NYSE Composite and SEP Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SEP Acquisition Corp
Pair trading matchups for SEP Acquisition
Pair Trading with NYSE Composite and SEP Acquisition
The main advantage of trading using opposite NYSE Composite and SEP Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SEP Acquisition 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 SEP Acquisition will offset losses from the drop in SEP Acquisition's long position.| NYSE Composite vs. Air Products and | NYSE Composite vs. Allient | NYSE Composite vs. Ecovyst | NYSE Composite vs. CTS Corporation |
| SEP Acquisition vs. AMCON Distributing | SEP Acquisition vs. Acco Brands | SEP Acquisition vs. Skillful Craftsman Education | SEP Acquisition vs. John Wiley Sons |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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