Correlation Between NYSE Composite and NOVARTIS
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By analyzing existing cross correlation between NYSE Composite and NOVARTIS CAP P, you can compare the effects of market volatilities on NYSE Composite and NOVARTIS 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 NOVARTIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and NOVARTIS.
Diversification Opportunities for NYSE Composite and NOVARTIS
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and NOVARTIS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and NOVARTIS CAP P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVARTIS CAP P 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 NOVARTIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVARTIS CAP P has no effect on the direction of NYSE Composite i.e., NYSE Composite and NOVARTIS go up and down completely randomly.
Pair Corralation between NYSE Composite and NOVARTIS
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.3 times more return on investment than NOVARTIS. However, NYSE Composite is 1.3 times more volatile than NOVARTIS CAP P. It trades about 0.27 of its potential returns per unit of risk. NOVARTIS CAP P is currently generating about -0.22 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. NOVARTIS CAP P
Performance |
| Timeline |
NYSE Composite and NOVARTIS Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
NOVARTIS CAP P
Pair trading matchups for NOVARTIS
Pair Trading with NYSE Composite and NOVARTIS
The main advantage of trading using opposite NYSE Composite and NOVARTIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, NOVARTIS 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 NOVARTIS will offset losses from the drop in NOVARTIS's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| NOVARTIS vs. AEP TEX INC | NOVARTIS vs. US BANK NATIONAL | NOVARTIS vs. Nasdaq Inc | NOVARTIS vs. Vertiv Holdings Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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