Correlation Between NYSE Composite and Shenzhen Expressway
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Shenzhen Expressway 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 Shenzhen Expressway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Shenzhen Expressway, you can compare the effects of market volatilities on NYSE Composite and Shenzhen Expressway 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 Shenzhen Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Shenzhen Expressway.
Diversification Opportunities for NYSE Composite and Shenzhen Expressway
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Shenzhen is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Shenzhen Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Expressway 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 Shenzhen Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Expressway has no effect on the direction of NYSE Composite i.e., NYSE Composite and Shenzhen Expressway go up and down completely randomly.
Pair Corralation between NYSE Composite and Shenzhen Expressway
Assuming the 90 days trading horizon NYSE Composite is expected to generate about the same return on investment as Shenzhen Expressway. But, NYSE Composite is 3.09 times less risky than Shenzhen Expressway. It trades about 0.08 of its potential returns per unit of risk. Shenzhen Expressway is currently generating about 0.03 per unit of risk. If you would invest 75.00 in Shenzhen Expressway on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Shenzhen Expressway or generate 18.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Shenzhen Expressway
Performance |
| Timeline |
NYSE Composite and Shenzhen Expressway Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Shenzhen Expressway
Pair trading matchups for Shenzhen Expressway
Pair Trading with NYSE Composite and Shenzhen Expressway
The main advantage of trading using opposite NYSE Composite and Shenzhen Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Shenzhen Expressway 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 Shenzhen Expressway will offset losses from the drop in Shenzhen Expressway's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Shenzhen Expressway vs. Verra Mobility Corp | Shenzhen Expressway vs. HUMANA INC | Shenzhen Expressway vs. Aquagold International | Shenzhen Expressway vs. Barloworld Ltd ADR |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |