Correlation Between NYSE Composite and SYS
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SYS 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 SYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SYS, you can compare the effects of market volatilities on NYSE Composite and SYS 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 SYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SYS.
Diversification Opportunities for NYSE Composite and SYS
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and SYS is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYS 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 SYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYS has no effect on the direction of NYSE Composite i.e., NYSE Composite and SYS go up and down completely randomly.
Pair Corralation between NYSE Composite and SYS
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.15 times less return on investment than SYS. But when comparing it to its historical volatility, NYSE Composite is 10.62 times less risky than SYS. It trades about 0.42 of its potential returns per unit of risk. SYS is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 9.87 in SYS on September 1, 2024 and sell it today you would earn a total of 4.13 from holding SYS or generate 41.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. SYS
Performance |
| Timeline |
NYSE Composite and SYS Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SYS
Pair trading matchups for SYS
Pair Trading with NYSE Composite and SYS
The main advantage of trading using opposite NYSE Composite and SYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SYS 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 SYS will offset losses from the drop in SYS's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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