Correlation Between NYSE Composite and Cactus
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cactus 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 Cactus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cactus Inc, you can compare the effects of market volatilities on NYSE Composite and Cactus 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 Cactus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cactus.
Diversification Opportunities for NYSE Composite and Cactus
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Cactus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cactus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cactus Inc 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 Cactus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cactus Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cactus go up and down completely randomly.
Pair Corralation between NYSE Composite and Cactus
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.81 times less return on investment than Cactus. But when comparing it to its historical volatility, NYSE Composite is 4.79 times less risky than Cactus. It trades about 0.24 of its potential returns per unit of risk. Cactus Inc is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,759 in Cactus Inc on August 28, 2024 and sell it today you would earn a total of 1,190 from holding Cactus Inc or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Cactus Inc
Performance |
| Timeline |
NYSE Composite and Cactus Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cactus Inc
Pair trading matchups for Cactus
Pair Trading with NYSE Composite and Cactus
The main advantage of trading using opposite NYSE Composite and Cactus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cactus 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 Cactus will offset losses from the drop in Cactus' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Cactus vs. ChampionX | Cactus vs. Expro Group Holdings | Cactus vs. Ranger Energy Services | Cactus vs. MRC Global |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |