Correlation Between NYSE Composite and Guggenheim Mid
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Guggenheim Mid 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 Guggenheim Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Guggenheim Mid Cap, you can compare the effects of market volatilities on NYSE Composite and Guggenheim Mid 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 Guggenheim Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Guggenheim Mid.
Diversification Opportunities for NYSE Composite and Guggenheim Mid
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Guggenheim is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Guggenheim Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Mid 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 Guggenheim Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Mid Cap has no effect on the direction of NYSE Composite i.e., NYSE Composite and Guggenheim Mid go up and down completely randomly.
Pair Corralation between NYSE Composite and Guggenheim Mid
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.6 times more return on investment than Guggenheim Mid. However, NYSE Composite is 1.66 times less risky than Guggenheim Mid. It trades about 0.11 of its potential returns per unit of risk. Guggenheim Mid Cap is currently generating about 0.02 per unit of risk. If you would invest 1,663,938 in NYSE Composite on November 9, 2024 and sell it today you would earn a total of 351,820 from holding NYSE Composite or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Guggenheim Mid Cap
Performance |
| Timeline |
NYSE Composite and Guggenheim Mid Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Guggenheim Mid Cap
Pair trading matchups for Guggenheim Mid
Pair Trading with NYSE Composite and Guggenheim Mid
The main advantage of trading using opposite NYSE Composite and Guggenheim Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Guggenheim Mid 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 Guggenheim Mid will offset losses from the drop in Guggenheim Mid's long position.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| Guggenheim Mid vs. Alger Health Sciences | Guggenheim Mid vs. Deutsche Health And | Guggenheim Mid vs. Eventide Healthcare Life | Guggenheim Mid vs. Invesco Global Health |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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