Correlation Between NYSE Composite and Pegasus Resources
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Pegasus Resources 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 Pegasus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Pegasus Resources, you can compare the effects of market volatilities on NYSE Composite and Pegasus Resources 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 Pegasus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pegasus Resources.
Diversification Opportunities for NYSE Composite and Pegasus Resources
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Pegasus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pegasus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Resources 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 Pegasus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Resources has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pegasus Resources go up and down completely randomly.
Pair Corralation between NYSE Composite and Pegasus Resources
Assuming the 90 days trading horizon NYSE Composite is expected to generate 86.69 times less return on investment than Pegasus Resources. But when comparing it to its historical volatility, NYSE Composite is 114.06 times less risky than Pegasus Resources. It trades about 0.14 of its potential returns per unit of risk. Pegasus Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Pegasus Resources on August 26, 2024 and sell it today you would lose (4.00) from holding Pegasus Resources or give up 26.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pegasus Resources
Performance |
| Timeline |
NYSE Composite and Pegasus Resources Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pegasus Resources
Pair trading matchups for Pegasus Resources
Pair Trading with NYSE Composite and Pegasus Resources
The main advantage of trading using opposite NYSE Composite and Pegasus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Pegasus Resources 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 Pegasus Resources will offset losses from the drop in Pegasus Resources' long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Pegasus Resources vs. Chalice Mining Limited | Pegasus Resources vs. Niobay Metals | Pegasus Resources vs. Freegold Ventures Limited | Pegasus Resources vs. Wallbridge Mining |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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