Correlation Between NYSE Composite and IShares 20
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and IShares 20 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 IShares 20 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and iShares 20 Year, you can compare the effects of market volatilities on NYSE Composite and IShares 20 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 IShares 20. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and IShares 20.
Diversification Opportunities for NYSE Composite and IShares 20
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and IShares is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and iShares 20 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 20 Year 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 IShares 20. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares 20 Year has no effect on the direction of NYSE Composite i.e., NYSE Composite and IShares 20 go up and down completely randomly.
Pair Corralation between NYSE Composite and IShares 20
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.72 times more return on investment than IShares 20. However, NYSE Composite is 1.38 times less risky than IShares 20. It trades about 0.14 of its potential returns per unit of risk. iShares 20 Year is currently generating about 0.01 per unit of risk. If you would invest 1,613,685 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 413,519 from holding NYSE Composite or generate 25.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. iShares 20 Year
Performance |
| Timeline |
NYSE Composite and IShares 20 Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
iShares 20 Year
Pair trading matchups for IShares 20
Pair Trading with NYSE Composite and IShares 20
The main advantage of trading using opposite NYSE Composite and IShares 20 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, IShares 20 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 IShares 20 will offset losses from the drop in IShares 20's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| IShares 20 vs. iShares 7 10 Year | IShares 20 vs. iShares 1 3 Year | IShares 20 vs. iShares Russell 2000 | IShares 20 vs. iShares iBoxx Investment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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