Correlation Between NYSE Composite and Silence Therapeutics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Silence Therapeutics 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 Silence Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Silence Therapeutics PLC, you can compare the effects of market volatilities on NYSE Composite and Silence Therapeutics 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 Silence Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Silence Therapeutics.
Diversification Opportunities for NYSE Composite and Silence Therapeutics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Silence is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Silence Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silence Therapeutics PLC 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 Silence Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silence Therapeutics PLC has no effect on the direction of NYSE Composite i.e., NYSE Composite and Silence Therapeutics go up and down completely randomly.
Pair Corralation between NYSE Composite and Silence Therapeutics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.07 times more return on investment than Silence Therapeutics. However, NYSE Composite is 13.69 times less risky than Silence Therapeutics. It trades about 0.24 of its potential returns per unit of risk. Silence Therapeutics PLC is currently generating about -0.41 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% 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. Silence Therapeutics PLC
Performance |
| Timeline |
NYSE Composite and Silence Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Silence Therapeutics PLC
Pair trading matchups for Silence Therapeutics
Pair Trading with NYSE Composite and Silence Therapeutics
The main advantage of trading using opposite NYSE Composite and Silence Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Silence Therapeutics 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 Silence Therapeutics will offset losses from the drop in Silence Therapeutics' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Silence Therapeutics vs. Cidara Therapeutics | Silence Therapeutics vs. Applied Therapeutics | Silence Therapeutics vs. CytomX Therapeutics | Silence Therapeutics vs. Shattuck Labs |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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