Correlation Between NYSE Composite and Health Biotchnology
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Health Biotchnology 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 Health Biotchnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Health Biotchnology Portfolio, you can compare the effects of market volatilities on NYSE Composite and Health Biotchnology 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 Health Biotchnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Health Biotchnology.
Diversification Opportunities for NYSE Composite and Health Biotchnology
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Health is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Health Biotchnology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Biotchnology 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 Health Biotchnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Biotchnology has no effect on the direction of NYSE Composite i.e., NYSE Composite and Health Biotchnology go up and down completely randomly.
Pair Corralation between NYSE Composite and Health Biotchnology
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.62 times more return on investment than Health Biotchnology. However, NYSE Composite is 1.6 times less risky than Health Biotchnology. It trades about 0.42 of its potential returns per unit of risk. Health Biotchnology Portfolio is currently generating about 0.07 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Health Biotchnology Portfolio
Performance |
| Timeline |
NYSE Composite and Health Biotchnology Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Health Biotchnology Portfolio
Pair trading matchups for Health Biotchnology
Pair Trading with NYSE Composite and Health Biotchnology
The main advantage of trading using opposite NYSE Composite and Health Biotchnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Health Biotchnology 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 Health Biotchnology will offset losses from the drop in Health Biotchnology's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Health Biotchnology vs. Scharf Global Opportunity | Health Biotchnology vs. Fabxx | Health Biotchnology vs. Volumetric Fund Volumetric | Health Biotchnology vs. T Rowe Price |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |