Correlation Between NYSE Composite and MASCO
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By analyzing existing cross correlation between NYSE Composite and MASCO P 775, you can compare the effects of market volatilities on NYSE Composite and MASCO 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 MASCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and MASCO.
Diversification Opportunities for NYSE Composite and MASCO
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and MASCO is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and MASCO P 775 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MASCO P 775 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 MASCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MASCO P 775 has no effect on the direction of NYSE Composite i.e., NYSE Composite and MASCO go up and down completely randomly.
Pair Corralation between NYSE Composite and MASCO
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.66 times more return on investment than MASCO. However, NYSE Composite is 1.52 times less risky than MASCO. It trades about 0.08 of its potential returns per unit of risk. MASCO P 775 is currently generating about 0.01 per unit of risk. If you would invest 1,546,867 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 480,337 from holding NYSE Composite or generate 31.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.55% |
| Values | Daily Returns |
NYSE Composite vs. MASCO P 775
Performance |
| Timeline |
NYSE Composite and MASCO Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
MASCO P 775
Pair trading matchups for MASCO
Pair Trading with NYSE Composite and MASCO
The main advantage of trading using opposite NYSE Composite and MASCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, MASCO 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 MASCO will offset losses from the drop in MASCO's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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