Correlation Between NYSE Composite and Silver Spike
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Silver Spike 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 Silver Spike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Silver Spike Investment, you can compare the effects of market volatilities on NYSE Composite and Silver Spike 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 Silver Spike. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Silver Spike.
Diversification Opportunities for NYSE Composite and Silver Spike
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Silver is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Silver Spike Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Spike Investment 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 Silver Spike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Spike Investment has no effect on the direction of NYSE Composite i.e., NYSE Composite and Silver Spike go up and down completely randomly.
Pair Corralation between NYSE Composite and Silver Spike
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.83 times less return on investment than Silver Spike. But when comparing it to its historical volatility, NYSE Composite is 2.61 times less risky than Silver Spike. It trades about 0.13 of its potential returns per unit of risk. Silver Spike Investment is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 718.00 in Silver Spike Investment on August 28, 2024 and sell it today you would earn a total of 578.00 from holding Silver Spike Investment or generate 80.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.04% |
| Values | Daily Returns |
NYSE Composite vs. Silver Spike Investment
Performance |
| Timeline |
NYSE Composite and Silver Spike Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Silver Spike Investment
Pair trading matchups for Silver Spike
Pair Trading with NYSE Composite and Silver Spike
The main advantage of trading using opposite NYSE Composite and Silver Spike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Silver Spike 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 Silver Spike will offset losses from the drop in Silver Spike's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Silver Spike vs. Entourage Health Corp | Silver Spike vs. Avicanna | Silver Spike vs. Benchmark Botanics | Silver Spike vs. Speakeasy Cannabis Club |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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