Correlation Between NYSE Composite and Simt Global
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Simt Global 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 Simt Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Simt Global Managed, you can compare the effects of market volatilities on NYSE Composite and Simt Global 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 Simt Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Simt Global.
Diversification Opportunities for NYSE Composite and Simt Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Simt is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Simt Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Global Managed 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 Simt Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Global Managed has no effect on the direction of NYSE Composite i.e., NYSE Composite and Simt Global go up and down completely randomly.
Pair Corralation between NYSE Composite and Simt Global
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.32 times more return on investment than Simt Global. However, NYSE Composite is 1.32 times more volatile than Simt Global Managed. It trades about 0.08 of its potential returns per unit of risk. Simt Global Managed is currently generating about 0.05 per unit of risk. If you would invest 1,529,105 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 491,877 from holding NYSE Composite or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Simt Global Managed
Performance |
| Timeline |
NYSE Composite and Simt Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Simt Global Managed
Pair trading matchups for Simt Global
Pair Trading with NYSE Composite and Simt Global
The main advantage of trading using opposite NYSE Composite and Simt Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Simt Global 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 Simt Global will offset losses from the drop in Simt Global's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Simt Global vs. Angel Oak Financial | Simt Global vs. Touchstone Ohio Tax | Simt Global vs. Dws Government Money | Simt Global vs. Prudential Jennison Financial |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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