Correlation Between NYSE Composite and SPX Corp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SPX Corp 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 SPX Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SPX Corp, you can compare the effects of market volatilities on NYSE Composite and SPX Corp 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 SPX Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SPX Corp.
Diversification Opportunities for NYSE Composite and SPX Corp
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and SPX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SPX Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPX Corp 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 SPX Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPX Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and SPX Corp go up and down completely randomly.
Pair Corralation between NYSE Composite and SPX Corp
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.61 times less return on investment than SPX Corp. But when comparing it to its historical volatility, NYSE Composite is 2.91 times less risky than SPX Corp. It trades about 0.11 of its potential returns per unit of risk. SPX Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,715 in SPX Corp on August 29, 2024 and sell it today you would earn a total of 9,785 from holding SPX Corp or generate 126.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. SPX Corp
Performance |
| Timeline |
NYSE Composite and SPX Corp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SPX Corp
Pair trading matchups for SPX Corp
Pair Trading with NYSE Composite and SPX Corp
The main advantage of trading using opposite NYSE Composite and SPX Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SPX Corp 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 SPX Corp will offset losses from the drop in SPX Corp's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| SPX Corp vs. Standex International | SPX Corp vs. Enpro Industries | SPX Corp vs. Thermon Group Holdings | SPX Corp vs. Enerpac Tool Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |