Correlation Between NYSE Composite and Stratus Properties
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Stratus Properties 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 Stratus Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stratus Properties, you can compare the effects of market volatilities on NYSE Composite and Stratus Properties 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 Stratus Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stratus Properties.
Diversification Opportunities for NYSE Composite and Stratus Properties
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Stratus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Stratus Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratus Properties 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 Stratus Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratus Properties has no effect on the direction of NYSE Composite i.e., NYSE Composite and Stratus Properties go up and down completely randomly.
Pair Corralation between NYSE Composite and Stratus Properties
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.42 times less return on investment than Stratus Properties. But when comparing it to its historical volatility, NYSE Composite is 8.72 times less risky than Stratus Properties. It trades about 0.21 of its potential returns per unit of risk. Stratus Properties is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,261 in Stratus Properties on August 27, 2024 and sell it today you would earn a total of 381.00 from holding Stratus Properties or generate 16.85% 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. Stratus Properties
Performance |
| Timeline |
NYSE Composite and Stratus Properties Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stratus Properties
Pair trading matchups for Stratus Properties
Pair Trading with NYSE Composite and Stratus Properties
The main advantage of trading using opposite NYSE Composite and Stratus Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Stratus Properties 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 Stratus Properties will offset losses from the drop in Stratus Properties' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Stratus Properties vs. Mitsui Fudosan Co | Stratus Properties vs. St Joe Company | Stratus Properties vs. New World Development |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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