Correlation Between NYSE Composite and Trinity Industries
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Trinity Industries 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 Trinity Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Trinity Industries, you can compare the effects of market volatilities on NYSE Composite and Trinity Industries 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 Trinity Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Trinity Industries.
Diversification Opportunities for NYSE Composite and Trinity Industries
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Trinity is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Trinity Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Industries 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 Trinity Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Industries has no effect on the direction of NYSE Composite i.e., NYSE Composite and Trinity Industries go up and down completely randomly.
Pair Corralation between NYSE Composite and Trinity Industries
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.39 times more return on investment than Trinity Industries. However, NYSE Composite is 2.55 times less risky than Trinity Industries. It trades about -0.33 of its potential returns per unit of risk. Trinity Industries is currently generating about -0.43 per unit of risk. If you would invest 2,006,231 in NYSE Composite on December 14, 2024 and sell it today you would lose (118,678) from holding NYSE Composite or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Trinity Industries
Performance |
| Timeline |
NYSE Composite and Trinity Industries Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Trinity Industries
Pair trading matchups for Trinity Industries
Pair Trading with NYSE Composite and Trinity Industries
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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