Correlation Between NYSE Composite and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aggressive Growth 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 Aggressive Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aggressive Growth Fund, you can compare the effects of market volatilities on NYSE Composite and Aggressive Growth 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 Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aggressive Growth.
Diversification Opportunities for NYSE Composite and Aggressive Growth
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Aggressive is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aggressive Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Growth 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 Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aggressive Growth go up and down completely randomly.
Pair Corralation between NYSE Composite and Aggressive Growth
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.1 times less return on investment than Aggressive Growth. But when comparing it to its historical volatility, NYSE Composite is 1.64 times less risky than Aggressive Growth. It trades about 0.08 of its potential returns per unit of risk. Aggressive Growth Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,923 in Aggressive Growth Fund on November 27, 2024 and sell it today you would earn a total of 2,681 from holding Aggressive Growth Fund or generate 68.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Aggressive Growth Fund
Performance |
| Timeline |
NYSE Composite and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aggressive Growth Fund
Pair trading matchups for Aggressive Growth
Pair Trading with NYSE Composite and Aggressive Growth
The main advantage of trading using opposite NYSE Composite and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.| NYSE Composite vs. Unum Group | NYSE Composite vs. Palomar Holdings | NYSE Composite vs. Fidelity National Financial | NYSE Composite vs. ZW Data Action |
| Aggressive Growth vs. Pimco Energy Tactical | Aggressive Growth vs. Franklin Natural Resources | Aggressive Growth vs. Vanguard Energy Index | Aggressive Growth vs. Adams Natural Resources |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |