Correlation Between NYSE Composite and DOMTAR
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By analyzing existing cross correlation between NYSE Composite and DOMTAR P 675, you can compare the effects of market volatilities on NYSE Composite and DOMTAR 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 DOMTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and DOMTAR.
Diversification Opportunities for NYSE Composite and DOMTAR
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and DOMTAR is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and DOMTAR P 675 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOMTAR P 675 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 DOMTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOMTAR P 675 has no effect on the direction of NYSE Composite i.e., NYSE Composite and DOMTAR go up and down completely randomly.
Pair Corralation between NYSE Composite and DOMTAR
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.51 times less return on investment than DOMTAR. But when comparing it to its historical volatility, NYSE Composite is 5.14 times less risky than DOMTAR. It trades about 0.09 of its potential returns per unit of risk. DOMTAR P 675 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,962 in DOMTAR P 675 on November 3, 2024 and sell it today you would earn a total of 405.00 from holding DOMTAR P 675 or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.71% |
| Values | Daily Returns |
NYSE Composite vs. DOMTAR P 675
Performance |
| Timeline |
NYSE Composite and DOMTAR Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
DOMTAR P 675
Pair trading matchups for DOMTAR
Pair Trading with NYSE Composite and DOMTAR
The main advantage of trading using opposite NYSE Composite and DOMTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, DOMTAR 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 DOMTAR will offset losses from the drop in DOMTAR's long position.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| DOMTAR vs. AEP TEX INC | DOMTAR vs. US BANK NATIONAL | DOMTAR vs. Valley National Bancorp | DOMTAR vs. LightPath Technologies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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