Correlation Between NYSE Composite and Abrdn Physical
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Abrdn Physical 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 Abrdn Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and abrdn Physical Gold, you can compare the effects of market volatilities on NYSE Composite and Abrdn Physical 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 Abrdn Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Abrdn Physical.
Diversification Opportunities for NYSE Composite and Abrdn Physical
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Abrdn is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and abrdn Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Physical Gold 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 Abrdn Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Physical Gold has no effect on the direction of NYSE Composite i.e., NYSE Composite and Abrdn Physical go up and down completely randomly.
Pair Corralation between NYSE Composite and Abrdn Physical
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.6 times less return on investment than Abrdn Physical. But when comparing it to its historical volatility, NYSE Composite is 1.2 times less risky than Abrdn Physical. It trades about 0.07 of its potential returns per unit of risk. abrdn Physical Gold is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,692 in abrdn Physical Gold on August 24, 2024 and sell it today you would earn a total of 859.00 from holding abrdn Physical Gold or generate 50.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. abrdn Physical Gold
Performance |
| Timeline |
NYSE Composite and Abrdn Physical Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
abrdn Physical Gold
Pair trading matchups for Abrdn Physical
Pair Trading with NYSE Composite and Abrdn Physical
The main advantage of trading using opposite NYSE Composite and Abrdn Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Abrdn Physical 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 Abrdn Physical will offset losses from the drop in Abrdn Physical's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Abrdn Physical vs. abrdn Physical Silver | Abrdn Physical vs. GraniteShares Gold Trust | Abrdn Physical vs. SPDR Gold MiniShares | Abrdn Physical vs. abrdn Physical Platinum |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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