Correlation Between NYSE Composite and SK Growth
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SK Growth 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 SK Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SK Growth Opportunities, you can compare the effects of market volatilities on NYSE Composite and SK Growth 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 SK Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SK Growth.
Diversification Opportunities for NYSE Composite and SK Growth
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and SKGR is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SK Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Growth Opportunities 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 SK Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Growth Opportunities has no effect on the direction of NYSE Composite i.e., NYSE Composite and SK Growth go up and down completely randomly.
Pair Corralation between NYSE Composite and SK Growth
Assuming the 90 days trading horizon NYSE Composite is expected to generate 9.0 times more return on investment than SK Growth. However, NYSE Composite is 9.0 times more volatile than SK Growth Opportunities. It trades about 0.18 of its potential returns per unit of risk. SK Growth Opportunities is currently generating about -0.13 per unit of risk. If you would invest 1,920,711 in NYSE Composite on October 23, 2024 and sell it today you would earn a total of 40,026 from holding NYSE Composite or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. SK Growth Opportunities
Performance |
| Timeline |
NYSE Composite and SK Growth Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SK Growth Opportunities
Pair trading matchups for SK Growth
Pair Trading with NYSE Composite and SK Growth
The main advantage of trading using opposite NYSE Composite and SK Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SK Growth 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 SK Growth will offset losses from the drop in SK Growth's long position.| NYSE Composite vs. IPG Photonics | NYSE Composite vs. Summit Materials | NYSE Composite vs. NetSol Technologies | NYSE Composite vs. Bill Com Holdings |
| SK Growth vs. Four Leaf Acquisition | SK Growth vs. WinVest Acquisition Corp | SK Growth vs. Alpha One | SK Growth vs. Manaris Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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