Correlation Between NYSE Composite and Sembcorp Marine
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Sembcorp Marine 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 Sembcorp Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sembcorp Marine, you can compare the effects of market volatilities on NYSE Composite and Sembcorp Marine 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 Sembcorp Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sembcorp Marine.
Diversification Opportunities for NYSE Composite and Sembcorp Marine
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Sembcorp is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Sembcorp Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sembcorp Marine 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 Sembcorp Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sembcorp Marine has no effect on the direction of NYSE Composite i.e., NYSE Composite and Sembcorp Marine go up and down completely randomly.
Pair Corralation between NYSE Composite and Sembcorp Marine
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.11 times more return on investment than Sembcorp Marine. However, NYSE Composite is 9.38 times less risky than Sembcorp Marine. It trades about 0.23 of its potential returns per unit of risk. Sembcorp Marine is currently generating about 0.01 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% 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. Sembcorp Marine
Performance |
| Timeline |
NYSE Composite and Sembcorp Marine Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sembcorp Marine
Pair trading matchups for Sembcorp Marine
Pair Trading with NYSE Composite and Sembcorp Marine
The main advantage of trading using opposite NYSE Composite and Sembcorp Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Sembcorp Marine 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 Sembcorp Marine will offset losses from the drop in Sembcorp Marine's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Sembcorp Marine vs. Austal Limited | Sembcorp Marine vs. Rolls Royce Holdings PLC | Sembcorp Marine vs. AAR Corp | Sembcorp Marine vs. Eve Holding |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |