Correlation Between NYSE Composite and Steppe Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Steppe Gold 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 Steppe Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Steppe Gold, you can compare the effects of market volatilities on NYSE Composite and Steppe Gold 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 Steppe Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Steppe Gold.
Diversification Opportunities for NYSE Composite and Steppe Gold
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Steppe is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Steppe Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steppe Gold 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 Steppe Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steppe Gold has no effect on the direction of NYSE Composite i.e., NYSE Composite and Steppe Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and Steppe Gold
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.2 times more return on investment than Steppe Gold. However, NYSE Composite is 4.94 times less risky than Steppe Gold. It trades about 0.43 of its potential returns per unit of risk. Steppe Gold is currently generating about -0.34 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 102,865 from holding NYSE Composite or generate 5.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Steppe Gold
Performance |
| Timeline |
NYSE Composite and Steppe Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Steppe Gold
Pair trading matchups for Steppe Gold
Pair Trading with NYSE Composite and Steppe Gold
The main advantage of trading using opposite NYSE Composite and Steppe Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Steppe Gold 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 Steppe Gold will offset losses from the drop in Steppe Gold's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Steppe Gold vs. Maple Gold Mines | Steppe Gold vs. Caledonia Mining | Steppe Gold vs. Fortuna Silver Mines | Steppe Gold vs. Sandstorm Gold Ltd |
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..
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