Correlation Between NYSE Composite and Sixty Six
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Sixty Six 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 Sixty Six into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sixty Six Oilfield, you can compare the effects of market volatilities on NYSE Composite and Sixty Six 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 Sixty Six. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sixty Six.
Diversification Opportunities for NYSE Composite and Sixty Six
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Sixty is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Sixty Six Oilfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixty Six Oilfield 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 Sixty Six. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixty Six Oilfield has no effect on the direction of NYSE Composite i.e., NYSE Composite and Sixty Six go up and down completely randomly.
Pair Corralation between NYSE Composite and Sixty Six
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.06 times more return on investment than Sixty Six. However, NYSE Composite is 16.11 times less risky than Sixty Six. It trades about 0.18 of its potential returns per unit of risk. Sixty Six Oilfield is currently generating about -0.21 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 52,921 from holding NYSE Composite or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Sixty Six Oilfield
Performance |
| Timeline |
NYSE Composite and Sixty Six Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sixty Six Oilfield
Pair trading matchups for Sixty Six
Pair Trading with NYSE Composite and Sixty Six
The main advantage of trading using opposite NYSE Composite and Sixty Six positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Sixty Six 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 Sixty Six will offset losses from the drop in Sixty Six's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Sixty Six vs. JPX Global | Sixty Six vs. Indo Global Exchange | Sixty Six vs. Intl Star | Sixty Six vs. Buyer Group International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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