Correlation Between NYSE Composite and Worksport
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Worksport 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 Worksport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Worksport, you can compare the effects of market volatilities on NYSE Composite and Worksport 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 Worksport. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Worksport.
Diversification Opportunities for NYSE Composite and Worksport
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Worksport is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Worksport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worksport 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 Worksport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worksport has no effect on the direction of NYSE Composite i.e., NYSE Composite and Worksport go up and down completely randomly.
Pair Corralation between NYSE Composite and Worksport
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.27 times less return on investment than Worksport. But when comparing it to its historical volatility, NYSE Composite is 9.37 times less risky than Worksport. It trades about 0.15 of its potential returns per unit of risk. Worksport is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Worksport on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Worksport or generate 17.31% 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. Worksport
Performance |
| Timeline |
NYSE Composite and Worksport Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Worksport
Pair trading matchups for Worksport
Pair Trading with NYSE Composite and Worksport
The main advantage of trading using opposite NYSE Composite and Worksport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Worksport 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 Worksport will offset losses from the drop in Worksport'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 |
| Worksport vs. Aeye Inc | Worksport vs. Luminar Technologies | Worksport vs. Modine Manufacturing | Worksport vs. Quantumscape Corp |
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.
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