Correlation Between NYSE Composite and Swiss Helvetia
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Swiss Helvetia 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 Swiss Helvetia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Swiss Helvetia Closed, you can compare the effects of market volatilities on NYSE Composite and Swiss Helvetia 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 Swiss Helvetia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Swiss Helvetia.
Diversification Opportunities for NYSE Composite and Swiss Helvetia
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Swiss is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Swiss Helvetia Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Helvetia Closed 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 Swiss Helvetia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Helvetia Closed has no effect on the direction of NYSE Composite i.e., NYSE Composite and Swiss Helvetia go up and down completely randomly.
Pair Corralation between NYSE Composite and Swiss Helvetia
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Swiss Helvetia. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 1.2 times less risky than Swiss Helvetia. The index trades about -0.05 of its potential returns per unit of risk. The Swiss Helvetia Closed is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 869.00 in Swiss Helvetia Closed on November 27, 2024 and sell it today you would earn a total of 34.00 from holding Swiss Helvetia Closed or generate 3.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Swiss Helvetia Closed
Performance |
Timeline |
NYSE Composite and Swiss Helvetia Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Swiss Helvetia Closed
Pair trading matchups for Swiss Helvetia
Pair Trading with NYSE Composite and Swiss Helvetia
The main advantage of trading using opposite NYSE Composite and Swiss Helvetia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Swiss Helvetia 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 Swiss Helvetia will offset losses from the drop in Swiss Helvetia's long position.NYSE Composite vs. Unum Group | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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