Correlation Between NYSE Composite and Standex International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Standex International 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 Standex International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Standex International, you can compare the effects of market volatilities on NYSE Composite and Standex International 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 Standex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Standex International.
Diversification Opportunities for NYSE Composite and Standex International
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Standex is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Standex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standex International 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 Standex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standex International has no effect on the direction of NYSE Composite i.e., NYSE Composite and Standex International go up and down completely randomly.
Pair Corralation between NYSE Composite and Standex International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.12 times less return on investment than Standex International. But when comparing it to its historical volatility, NYSE Composite is 4.34 times less risky than Standex International. It trades about 0.24 of its potential returns per unit of risk. Standex International is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 17,909 in Standex International on August 28, 2024 and sell it today you would earn a total of 3,243 from holding Standex International or generate 18.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Standex International
Performance |
| Timeline |
NYSE Composite and Standex International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Standex International
Pair trading matchups for Standex International
Pair Trading with NYSE Composite and Standex International
The main advantage of trading using opposite NYSE Composite and Standex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Standex International 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 Standex International will offset losses from the drop in Standex International's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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