Correlation Between NYSE Composite and Solitron Devices
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Solitron Devices 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 Solitron Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Solitron Devices, you can compare the effects of market volatilities on NYSE Composite and Solitron Devices 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 Solitron Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Solitron Devices.
Diversification Opportunities for NYSE Composite and Solitron Devices
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Solitron is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Solitron Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solitron Devices 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 Solitron Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solitron Devices has no effect on the direction of NYSE Composite i.e., NYSE Composite and Solitron Devices go up and down completely randomly.
Pair Corralation between NYSE Composite and Solitron Devices
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than Solitron Devices. However, NYSE Composite is 3.97 times less risky than Solitron Devices. It trades about 0.12 of its potential returns per unit of risk. Solitron Devices is currently generating about 0.0 per unit of risk. If you would invest 1,711,558 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 310,387 from holding NYSE Composite or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Solitron Devices
Performance |
| Timeline |
NYSE Composite and Solitron Devices Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Solitron Devices
Pair trading matchups for Solitron Devices
Pair Trading with NYSE Composite and Solitron Devices
The main advantage of trading using opposite NYSE Composite and Solitron Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Solitron Devices 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 Solitron Devices will offset losses from the drop in Solitron Devices' long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Solitron Devices vs. Nova | Solitron Devices vs. inTest | Solitron Devices vs. Onto Innovation | Solitron Devices vs. Kulicke and Soffa |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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