Correlation Between NYSE Composite and Union Electric
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Union Electric 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 Union Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Union Electric, you can compare the effects of market volatilities on NYSE Composite and Union Electric 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 Union Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Union Electric.
Diversification Opportunities for NYSE Composite and Union Electric
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Union is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of NYSE Composite i.e., NYSE Composite and Union Electric go up and down completely randomly.
Pair Corralation between NYSE Composite and Union Electric
If you would invest 1,924,339 in NYSE Composite on September 5, 2024 and sell it today you would earn a total of 94,242 from holding NYSE Composite or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
NYSE Composite vs. Union Electric
Performance |
| Timeline |
NYSE Composite and Union Electric Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Union Electric
Pair trading matchups for Union Electric
Pair Trading with NYSE Composite and Union Electric
The main advantage of trading using opposite NYSE Composite and Union Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Union Electric 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 Union Electric will offset losses from the drop in Union Electric's long position.| NYSE Composite vs. Air Products and | NYSE Composite vs. Playtika Holding Corp | NYSE Composite vs. PepsiCo | NYSE Composite vs. NETGEAR |
| Union Electric vs. IDACORP | Union Electric vs. Pinnacle West Capital | Union Electric vs. Portland General Electric | Union Electric vs. CMS Energy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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