Correlation Between NYSE Composite and Stanley Black
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Stanley Black 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 Stanley Black into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stanley Black Decker, you can compare the effects of market volatilities on NYSE Composite and Stanley Black 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 Stanley Black. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stanley Black.
Diversification Opportunities for NYSE Composite and Stanley Black
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Stanley is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Stanley Black Decker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Black Decker 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 Stanley Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Black Decker has no effect on the direction of NYSE Composite i.e., NYSE Composite and Stanley Black go up and down completely randomly.
Pair Corralation between NYSE Composite and Stanley Black
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.32 times more return on investment than Stanley Black. However, NYSE Composite is 3.08 times less risky than Stanley Black. It trades about 0.26 of its potential returns per unit of risk. Stanley Black Decker is currently generating about -0.09 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Stanley Black Decker
Performance |
| Timeline |
NYSE Composite and Stanley Black Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stanley Black Decker
Pair trading matchups for Stanley Black
Pair Trading with NYSE Composite and Stanley Black
The main advantage of trading using opposite NYSE Composite and Stanley Black positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Stanley Black 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 Stanley Black will offset losses from the drop in Stanley Black's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| Stanley Black vs. Toro Co | Stanley Black vs. Timken Company | Stanley Black vs. Lincoln Electric Holdings | Stanley Black vs. Kennametal |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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