Correlation Between NYSE Composite and Universal Power
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Universal Power 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 Universal Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Universal Power Industry, you can compare the effects of market volatilities on NYSE Composite and Universal Power 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 Universal Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Universal Power.
Diversification Opportunities for NYSE Composite and Universal Power
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Universal is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Universal Power Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Power Industry 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 Universal Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Power Industry has no effect on the direction of NYSE Composite i.e., NYSE Composite and Universal Power go up and down completely randomly.
Pair Corralation between NYSE Composite and Universal Power
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.51 times more return on investment than Universal Power. However, NYSE Composite is 1.96 times less risky than Universal Power. It trades about 0.42 of its potential returns per unit of risk. Universal Power Industry is currently generating about -0.21 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Universal Power Industry
Performance |
| Timeline |
NYSE Composite and Universal Power Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Universal Power Industry
Pair trading matchups for Universal Power
Pair Trading with NYSE Composite and Universal Power
The main advantage of trading using opposite NYSE Composite and Universal Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Universal Power 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 Universal Power will offset losses from the drop in Universal Power's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Universal Power vs. National Health Scan | Universal Power vs. Protect Pharmaceutical | Universal Power vs. World Oil Group | Universal Power vs. Steel Partners Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |