Correlation Between NYSE Composite and PACIFIC
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By analyzing existing cross correlation between NYSE Composite and PACIFIC GAS ELECTRIC, you can compare the effects of market volatilities on NYSE Composite and PACIFIC 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 PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and PACIFIC.
Diversification Opportunities for NYSE Composite and PACIFIC
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and PACIFIC is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and PACIFIC GAS ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACIFIC GAS ELECTRIC 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 PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACIFIC GAS ELECTRIC has no effect on the direction of NYSE Composite i.e., NYSE Composite and PACIFIC go up and down completely randomly.
Pair Corralation between NYSE Composite and PACIFIC
Assuming the 90 days trading horizon NYSE Composite is expected to generate 38.33 times less return on investment than PACIFIC. But when comparing it to its historical volatility, NYSE Composite is 63.61 times less risky than PACIFIC. It trades about 0.07 of its potential returns per unit of risk. PACIFIC GAS ELECTRIC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,140 in PACIFIC GAS ELECTRIC on November 2, 2024 and sell it today you would earn a total of 370.00 from holding PACIFIC GAS ELECTRIC or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.77% |
| Values | Daily Returns |
NYSE Composite vs. PACIFIC GAS ELECTRIC
Performance |
| Timeline |
NYSE Composite and PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
PACIFIC GAS ELECTRIC
Pair trading matchups for PACIFIC
Pair Trading with NYSE Composite and PACIFIC
The main advantage of trading using opposite NYSE Composite and PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, PACIFIC 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 PACIFIC will offset losses from the drop in PACIFIC's long position.| NYSE Composite vs. Palomar Holdings | NYSE Composite vs. The Peoples Insurance | NYSE Composite vs. Radian Group | NYSE Composite vs. Nascent Wine |
| PACIFIC vs. Lithia Motors | PACIFIC vs. MYT Netherlands Parent | PACIFIC vs. Sea | PACIFIC 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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