Correlation Between NYSE Composite and ASSURED

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Can any of the company-specific risk be diversified away by investing in both NYSE Composite and ASSURED 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 ASSURED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ASSURED GTY HLDGS, you can compare the effects of market volatilities on NYSE Composite and ASSURED 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 ASSURED. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ASSURED.

Diversification Opportunities for NYSE Composite and ASSURED

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between NYSE and ASSURED is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ASSURED GTY HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSURED GTY HLDGS 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 ASSURED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSURED GTY HLDGS has no effect on the direction of NYSE Composite i.e., NYSE Composite and ASSURED go up and down completely randomly.
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Pair Corralation between NYSE Composite and ASSURED

Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.39 times more return on investment than ASSURED. However, NYSE Composite is 2.59 times less risky than ASSURED. It trades about 0.08 of its potential returns per unit of risk. ASSURED GTY HLDGS is currently generating about 0.02 per unit of risk. If you would invest  1,551,444  in NYSE Composite on August 31, 2024 and sell it today you would earn a total of  475,760  from holding NYSE Composite or generate 30.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy81.17%
ValuesDaily Returns

NYSE Composite  vs.  ASSURED GTY HLDGS

 Performance 
       Timeline  

NYSE Composite and ASSURED Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NYSE Composite and ASSURED

The main advantage of trading using opposite NYSE Composite and ASSURED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, ASSURED 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 ASSURED will offset losses from the drop in ASSURED's long position.
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The idea behind NYSE Composite and ASSURED GTY HLDGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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