Correlation Between NYSE Composite and Vanguard Lifestrategy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Vanguard Lifestrategy 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 Vanguard Lifestrategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Vanguard Lifestrategy Moderate, you can compare the effects of market volatilities on NYSE Composite and Vanguard Lifestrategy 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 Vanguard Lifestrategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Vanguard Lifestrategy.
Diversification Opportunities for NYSE Composite and Vanguard Lifestrategy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Vanguard is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Vanguard Lifestrategy Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Lifestrategy 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 Vanguard Lifestrategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Lifestrategy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Vanguard Lifestrategy go up and down completely randomly.
Pair Corralation between NYSE Composite and Vanguard Lifestrategy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.31 times more return on investment than Vanguard Lifestrategy. However, NYSE Composite is 1.31 times more volatile than Vanguard Lifestrategy Moderate. It trades about 0.28 of its potential returns per unit of risk. Vanguard Lifestrategy Moderate is currently generating about 0.15 per unit of risk. If you would invest 1,925,429 in NYSE Composite on November 4, 2024 and sell it today you would earn a total of 74,453 from holding NYSE Composite or generate 3.87% 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. Vanguard Lifestrategy Moderate
Performance |
| Timeline |
NYSE Composite and Vanguard Lifestrategy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Vanguard Lifestrategy Moderate
Pair trading matchups for Vanguard Lifestrategy
Pair Trading with NYSE Composite and Vanguard Lifestrategy
The main advantage of trading using opposite NYSE Composite and Vanguard Lifestrategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Vanguard Lifestrategy 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 Vanguard Lifestrategy will offset losses from the drop in Vanguard Lifestrategy's long position.| NYSE Composite vs. Aris Water Solutions | NYSE Composite vs. Marfrig Global Foods | NYSE Composite vs. CenterPoint Energy | NYSE Composite vs. Sysco |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |