Correlation Between NYSE Composite and Shandong Weigao
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Shandong Weigao 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 Shandong Weigao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Shandong Weigao Group, you can compare the effects of market volatilities on NYSE Composite and Shandong Weigao 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 Shandong Weigao. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Shandong Weigao.
Diversification Opportunities for NYSE Composite and Shandong Weigao
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Shandong is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Shandong Weigao Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Weigao Group 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 Shandong Weigao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Weigao Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Shandong Weigao go up and down completely randomly.
Pair Corralation between NYSE Composite and Shandong Weigao
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.2 times more return on investment than Shandong Weigao. However, NYSE Composite is 4.92 times less risky than Shandong Weigao. It trades about 0.08 of its potential returns per unit of risk. Shandong Weigao Group is currently generating about -0.06 per unit of risk. If you would invest 1,549,498 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 471,824 from holding NYSE Composite or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.91% |
| Values | Daily Returns |
NYSE Composite vs. Shandong Weigao Group
Performance |
| Timeline |
NYSE Composite and Shandong Weigao Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Shandong Weigao Group
Pair trading matchups for Shandong Weigao
Pair Trading with NYSE Composite and Shandong Weigao
The main advantage of trading using opposite NYSE Composite and Shandong Weigao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Shandong Weigao 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 Shandong Weigao will offset losses from the drop in Shandong Weigao's long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
| Shandong Weigao vs. Coloplast A | Shandong Weigao vs. EssilorLuxottica Socit anonyme | Shandong Weigao vs. Carl Zeiss Meditec | Shandong Weigao vs. Carl Zeiss Meditec |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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