Correlation Between NYSE Composite and Soleno Therapeutics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Soleno 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 Soleno 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 Soleno Therapeutics, you can compare the effects of market volatilities on NYSE Composite and Soleno 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 Soleno Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Soleno Therapeutics.
Diversification Opportunities for NYSE Composite and Soleno Therapeutics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Soleno is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Soleno Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soleno Therapeutics 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 Soleno Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soleno Therapeutics has no effect on the direction of NYSE Composite i.e., NYSE Composite and Soleno Therapeutics go up and down completely randomly.
Pair Corralation between NYSE Composite and Soleno Therapeutics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 30.03 times less return on investment than Soleno Therapeutics. But when comparing it to its historical volatility, NYSE Composite is 32.13 times less risky than Soleno Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Soleno Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Soleno Therapeutics on August 25, 2024 and sell it today you would earn a total of 5,681 from holding Soleno Therapeutics or generate 5856.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Soleno Therapeutics
Performance |
| Timeline |
NYSE Composite and Soleno Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Soleno Therapeutics
Pair trading matchups for Soleno Therapeutics
Pair Trading with NYSE Composite and Soleno Therapeutics
The main advantage of trading using opposite NYSE Composite and Soleno Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Soleno 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 Soleno Therapeutics will offset losses from the drop in Soleno Therapeutics' long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Soleno Therapeutics vs. Eliem Therapeutics | Soleno Therapeutics vs. HCW Biologics | Soleno Therapeutics vs. RenovoRx | Soleno Therapeutics vs. Tempest Therapeutics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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