Correlation Between NYSE Composite and Tanke Biosciences
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Tanke Biosciences 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 Tanke Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Tanke Biosciences, you can compare the effects of market volatilities on NYSE Composite and Tanke Biosciences 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 Tanke Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Tanke Biosciences.
Diversification Opportunities for NYSE Composite and Tanke Biosciences
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and Tanke is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Tanke Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanke Biosciences 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 Tanke Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanke Biosciences has no effect on the direction of NYSE Composite i.e., NYSE Composite and Tanke Biosciences go up and down completely randomly.
Pair Corralation between NYSE Composite and Tanke Biosciences
Assuming the 90 days trading horizon NYSE Composite is expected to generate 21.86 times less return on investment than Tanke Biosciences. But when comparing it to its historical volatility, NYSE Composite is 42.03 times less risky than Tanke Biosciences. It trades about 0.1 of its potential returns per unit of risk. Tanke Biosciences is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Tanke Biosciences on August 26, 2024 and sell it today you would lose (10.00) from holding Tanke Biosciences or give up 90.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Tanke Biosciences
Performance |
| Timeline |
NYSE Composite and Tanke Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Tanke Biosciences
Pair trading matchups for Tanke Biosciences
Pair Trading with NYSE Composite and Tanke Biosciences
The main advantage of trading using opposite NYSE Composite and Tanke Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Tanke Biosciences 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 Tanke Biosciences will offset losses from the drop in Tanke Biosciences' long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Tanke Biosciences vs. Absolute Health and | Tanke Biosciences vs. China Health Management | Tanke Biosciences vs. Embrace Change Acquisition | Tanke Biosciences vs. TransAKT |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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