Correlation Between NYSE Composite and Stabilis Solutions
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Stabilis Solutions 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 Stabilis Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stabilis Solutions, you can compare the effects of market volatilities on NYSE Composite and Stabilis Solutions 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 Stabilis Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stabilis Solutions.
Diversification Opportunities for NYSE Composite and Stabilis Solutions
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Stabilis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Stabilis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stabilis Solutions 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 Stabilis Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stabilis Solutions has no effect on the direction of NYSE Composite i.e., NYSE Composite and Stabilis Solutions go up and down completely randomly.
Pair Corralation between NYSE Composite and Stabilis Solutions
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.17 times less return on investment than Stabilis Solutions. But when comparing it to its historical volatility, NYSE Composite is 7.09 times less risky than Stabilis Solutions. It trades about 0.41 of its potential returns per unit of risk. Stabilis Solutions is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 439.00 in Stabilis Solutions on September 2, 2024 and sell it today you would earn a total of 69.00 from holding Stabilis Solutions or generate 15.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Stabilis Solutions
Performance |
| Timeline |
NYSE Composite and Stabilis Solutions Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stabilis Solutions
Pair trading matchups for Stabilis Solutions
Pair Trading with NYSE Composite and Stabilis Solutions
The main advantage of trading using opposite NYSE Composite and Stabilis Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Stabilis Solutions 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 Stabilis Solutions will offset losses from the drop in Stabilis Solutions' long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Stabilis Solutions vs. Equinor ASA ADR | Stabilis Solutions vs. TotalEnergies SE ADR | Stabilis Solutions vs. Ecopetrol SA ADR | Stabilis Solutions vs. National Fuel Gas |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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