Correlation Between NYSE Composite and Energy
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By analyzing existing cross correlation between NYSE Composite and Energy Transfer 7125, 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
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Energy is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Energy Transfer 7125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Transfer 7125 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 7125 has no effect on the direction of NYSE Composite i.e., NYSE Composite and Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.4 times more return on investment than Energy. However, NYSE Composite is 2.49 times less risky than Energy. It trades about 0.15 of its potential returns per unit of risk. Energy Transfer 7125 is currently generating about -0.05 per unit of risk. If you would invest 1,793,449 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 233,755 from holding NYSE Composite or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. Energy Transfer 7125
Performance |
| Timeline |
NYSE Composite and Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Energy Transfer 7125
Pair trading matchups for Energy
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. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Energy vs. Rocky Brands | Energy vs. Inter Parfums | Energy vs. Weyco Group | Energy vs. Brandywine Realty Trust |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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