Correlation Between NYSE Composite and IShares Silver
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IShares Silver 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 IShares Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and iShares Silver Trust, you can compare the effects of market volatilities on NYSE Composite and IShares Silver 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 IShares Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IShares Silver.
Diversification Opportunities for NYSE Composite and IShares Silver
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and IShares is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and iShares Silver Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Silver Trust 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 IShares Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Silver Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and IShares Silver go up and down completely randomly.
Pair Corralation between NYSE Composite and IShares Silver
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.33 times more return on investment than IShares Silver. However, NYSE Composite is 2.99 times less risky than IShares Silver. It trades about 0.15 of its potential returns per unit of risk. iShares Silver Trust is currently generating about 0.02 per unit of risk. If you would invest 1,793,449 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 233,755 from holding NYSE Composite or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. iShares Silver Trust
Performance |
| Timeline |
NYSE Composite and IShares Silver Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
iShares Silver Trust
Pair trading matchups for IShares Silver
Pair Trading with NYSE Composite and IShares Silver
The main advantage of trading using opposite NYSE Composite and IShares Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IShares Silver 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 IShares Silver will offset losses from the drop in IShares Silver's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| IShares Silver vs. SPDR Gold Shares | IShares Silver vs. VanEck Gold Miners | IShares Silver vs. United States Oil | IShares Silver vs. iShares Gold Trust |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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