Correlation Between NYSE Composite and Surf Air
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Surf Air 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 Surf Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Surf Air Mobility, you can compare the effects of market volatilities on NYSE Composite and Surf Air 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 Surf Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Surf Air.
Diversification Opportunities for NYSE Composite and Surf Air
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Surf is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Surf Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surf Air Mobility 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 Surf Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surf Air Mobility has no effect on the direction of NYSE Composite i.e., NYSE Composite and Surf Air go up and down completely randomly.
Pair Corralation between NYSE Composite and Surf Air
Assuming the 90 days trading horizon NYSE Composite is expected to generate 14.93 times less return on investment than Surf Air. But when comparing it to its historical volatility, NYSE Composite is 13.22 times less risky than Surf Air. It trades about 0.24 of its potential returns per unit of risk. Surf Air Mobility is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 174.00 in Surf Air Mobility on August 27, 2024 and sell it today you would earn a total of 94.00 from holding Surf Air Mobility or generate 54.02% 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. Surf Air Mobility
Performance |
| Timeline |
NYSE Composite and Surf Air Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Surf Air Mobility
Pair trading matchups for Surf Air
Pair Trading with NYSE Composite and Surf Air
The main advantage of trading using opposite NYSE Composite and Surf Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Surf Air 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 Surf Air will offset losses from the drop in Surf Air's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Surf Air vs. Canlan Ice Sports | Surf Air vs. Academy Sports Outdoors | Surf Air vs. Verra Mobility Corp | Surf Air vs. Nyxoah |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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