Correlation Between NYSE Composite and Stolt Nielsen
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Stolt Nielsen 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 Stolt Nielsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stolt Nielsen Limited, you can compare the effects of market volatilities on NYSE Composite and Stolt Nielsen 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 Stolt Nielsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stolt Nielsen.
Diversification Opportunities for NYSE Composite and Stolt Nielsen
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Stolt is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Stolt Nielsen Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stolt Nielsen Limited 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 Stolt Nielsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stolt Nielsen Limited has no effect on the direction of NYSE Composite i.e., NYSE Composite and Stolt Nielsen go up and down completely randomly.
Pair Corralation between NYSE Composite and Stolt Nielsen
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.94 times less return on investment than Stolt Nielsen. But when comparing it to its historical volatility, NYSE Composite is 6.73 times less risky than Stolt Nielsen. It trades about 0.08 of its potential returns per unit of risk. Stolt Nielsen Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,641 in Stolt Nielsen Limited on September 13, 2024 and sell it today you would lose (66.00) from holding Stolt Nielsen Limited or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.45% |
| Values | Daily Returns |
NYSE Composite vs. Stolt Nielsen Limited
Performance |
| Timeline |
NYSE Composite and Stolt Nielsen Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stolt Nielsen Limited
Pair trading matchups for Stolt Nielsen
Pair Trading with NYSE Composite and Stolt Nielsen
The main advantage of trading using opposite NYSE Composite and Stolt Nielsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Stolt Nielsen 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 Stolt Nielsen will offset losses from the drop in Stolt Nielsen's long position.| NYSE Composite vs. Boston Beer | NYSE Composite vs. Freedom Bank of | NYSE Composite vs. KeyCorp | NYSE Composite vs. LithiumBank Resources Corp |
| Stolt Nielsen vs. Kawasaki Kisen Kaisha | Stolt Nielsen vs. MPC Container Ships | Stolt Nielsen vs. Mitsui OSK Lines | Stolt Nielsen vs. Pacific Basin Shipping |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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