Correlation Between NYSE Composite and ENERGY

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and ENERGY 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 ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ENERGY TRANSFER PARTNERS, you can compare the effects of market volatilities on NYSE Composite and ENERGY 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 ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ENERGY.

Diversification Opportunities for NYSE Composite and ENERGY

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between NYSE and ENERGY is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ENERGY TRANSFER PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGY TRANSFER PARTNERS 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 ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGY TRANSFER PARTNERS has no effect on the direction of NYSE Composite i.e., NYSE Composite and ENERGY go up and down completely randomly.
    Optimize

Pair Corralation between NYSE Composite and ENERGY

Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.34 times more return on investment than ENERGY. However, NYSE Composite is 2.94 times less risky than ENERGY. It trades about 0.24 of its potential returns per unit of risk. ENERGY TRANSFER PARTNERS is currently generating about -0.12 per unit of risk. If you would invest  1,954,967  in NYSE Composite on August 28, 2024 and sell it today you would earn a total of  67,069  from holding NYSE Composite or generate 3.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

NYSE Composite  vs.  ENERGY TRANSFER PARTNERS

 Performance 
       Timeline  

NYSE Composite and ENERGY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NYSE Composite and ENERGY

The main advantage of trading using opposite NYSE Composite and ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, ENERGY 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 ENERGY will offset losses from the drop in ENERGY's long position.
NYSE Composite vs. Hooker Furniture
NYSE Composite vs. Hudson Pacific Properties
NYSE Composite vs. Canlan Ice Sports
NYSE Composite vs. Boston Properties
The idea behind NYSE Composite and ENERGY TRANSFER PARTNERS 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.
ENERGY vs. AEP TEX INC
ENERGY vs. US BANK NATIONAL
ENERGY vs. Dupont De Nemours
ENERGY vs. The Travelers Companies
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY