Correlation Between NYSE Composite and Centaur Total
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Centaur Total 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 Centaur Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Centaur Total Return, you can compare the effects of market volatilities on NYSE Composite and Centaur Total 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 Centaur Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Centaur Total.
Diversification Opportunities for NYSE Composite and Centaur Total
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Centaur is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Centaur Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Total Return 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 Centaur Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Total Return has no effect on the direction of NYSE Composite i.e., NYSE Composite and Centaur Total go up and down completely randomly.
Pair Corralation between NYSE Composite and Centaur Total
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.01 times more return on investment than Centaur Total. However, NYSE Composite is 1.01 times more volatile than Centaur Total Return. It trades about 0.08 of its potential returns per unit of risk. Centaur Total Return is currently generating about 0.06 per unit of risk. If you would invest 1,508,153 in NYSE Composite on September 12, 2024 and sell it today you would earn a total of 480,037 from holding NYSE Composite or generate 31.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 74.09% |
| Values | Daily Returns |
NYSE Composite vs. Centaur Total Return
Performance |
| Timeline |
NYSE Composite and Centaur Total Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Centaur Total Return
Pair trading matchups for Centaur Total
Pair Trading with NYSE Composite and Centaur Total
The main advantage of trading using opposite NYSE Composite and Centaur Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Centaur Total 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 Centaur Total will offset losses from the drop in Centaur Total's long position.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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