Correlation Between NYSE Composite and Shineco
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Shineco 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 Shineco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Shineco, you can compare the effects of market volatilities on NYSE Composite and Shineco 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 Shineco. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Shineco.
Diversification Opportunities for NYSE Composite and Shineco
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Shineco is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Shineco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shineco 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 Shineco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shineco has no effect on the direction of NYSE Composite i.e., NYSE Composite and Shineco go up and down completely randomly.
Pair Corralation between NYSE Composite and Shineco
Assuming the 90 days trading horizon NYSE Composite is expected to generate 25.89 times less return on investment than Shineco. But when comparing it to its historical volatility, NYSE Composite is 62.65 times less risky than Shineco. It trades about 0.08 of its potential returns per unit of risk. Shineco is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,120 in Shineco on September 2, 2024 and sell it today you would lose (2,873) from holding Shineco or give up 92.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Shineco
Performance |
| Timeline |
NYSE Composite and Shineco Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Shineco
Pair trading matchups for Shineco
Pair Trading with NYSE Composite and Shineco
The main advantage of trading using opposite NYSE Composite and Shineco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Shineco 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 Shineco will offset losses from the drop in Shineco's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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