Correlation Between NYSE Composite and World Kinect
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and World Kinect 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 World Kinect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and World Kinect, you can compare the effects of market volatilities on NYSE Composite and World Kinect 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 World Kinect. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and World Kinect.
Diversification Opportunities for NYSE Composite and World Kinect
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and World is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and World Kinect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Kinect 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 World Kinect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Kinect has no effect on the direction of NYSE Composite i.e., NYSE Composite and World Kinect go up and down completely randomly.
Pair Corralation between NYSE Composite and World Kinect
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.1 times less return on investment than World Kinect. But when comparing it to its historical volatility, NYSE Composite is 2.68 times less risky than World Kinect. It trades about 0.21 of its potential returns per unit of risk. World Kinect is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,654 in World Kinect on August 27, 2024 and sell it today you would earn a total of 244.00 from holding World Kinect or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. World Kinect
Performance |
| Timeline |
NYSE Composite and World Kinect Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
World Kinect
Pair trading matchups for World Kinect
Pair Trading with NYSE Composite and World Kinect
The main advantage of trading using opposite NYSE Composite and World Kinect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, World Kinect 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 World Kinect will offset losses from the drop in World Kinect's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| World Kinect vs. HF Sinclair Corp | World Kinect vs. Adams Resources Energy | World Kinect vs. Delek Energy | World Kinect vs. CVR Energy |
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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