Correlation Between NYSE Composite and TrustCo Bank
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and TrustCo Bank 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 TrustCo Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and TrustCo Bank Corp, you can compare the effects of market volatilities on NYSE Composite and TrustCo Bank 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 TrustCo Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and TrustCo Bank.
Diversification Opportunities for NYSE Composite and TrustCo Bank
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and TrustCo is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and TrustCo Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrustCo Bank Corp 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 TrustCo Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrustCo Bank Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and TrustCo Bank go up and down completely randomly.
Pair Corralation between NYSE Composite and TrustCo Bank
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.5 times less return on investment than TrustCo Bank. But when comparing it to its historical volatility, NYSE Composite is 5.34 times less risky than TrustCo Bank. It trades about 0.42 of its potential returns per unit of risk. TrustCo Bank Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,298 in TrustCo Bank Corp on September 1, 2024 and sell it today you would earn a total of 426.00 from holding TrustCo Bank Corp or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. TrustCo Bank Corp
Performance |
| Timeline |
NYSE Composite and TrustCo Bank Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
TrustCo Bank Corp
Pair trading matchups for TrustCo Bank
Pair Trading with NYSE Composite and TrustCo Bank
The main advantage of trading using opposite NYSE Composite and TrustCo Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, TrustCo Bank 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 TrustCo Bank will offset losses from the drop in TrustCo Bank's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| TrustCo Bank vs. Southern Missouri Bancorp | TrustCo Bank vs. IF Bancorp | TrustCo Bank vs. Colony Bankcorp | TrustCo Bank vs. Old Point Financial |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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