Correlation Between NYSE Composite and Stagwell
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Stagwell 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 Stagwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stagwell, you can compare the effects of market volatilities on NYSE Composite and Stagwell 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 Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stagwell.
Diversification Opportunities for NYSE Composite and Stagwell
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Stagwell is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of NYSE Composite i.e., NYSE Composite and Stagwell go up and down completely randomly.
Pair Corralation between NYSE Composite and Stagwell
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.06 times less return on investment than Stagwell. But when comparing it to its historical volatility, NYSE Composite is 4.27 times less risky than Stagwell. It trades about 0.15 of its potential returns per unit of risk. Stagwell is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 705.00 in Stagwell on August 26, 2024 and sell it today you would earn a total of 77.00 from holding Stagwell or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Stagwell
Performance |
| Timeline |
NYSE Composite and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stagwell
Pair trading matchups for Stagwell
Pair Trading with NYSE Composite and Stagwell
The main advantage of trading using opposite NYSE Composite and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Stagwell vs. Innovid Corp | Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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