Correlation Between NYSE Composite and Wang Lee
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Wang Lee 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 Wang Lee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Wang Lee Group,, you can compare the effects of market volatilities on NYSE Composite and Wang Lee 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 Wang Lee. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Wang Lee.
Diversification Opportunities for NYSE Composite and Wang Lee
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Wang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Wang Lee Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wang Lee Group, 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 Wang Lee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wang Lee Group, has no effect on the direction of NYSE Composite i.e., NYSE Composite and Wang Lee go up and down completely randomly.
Pair Corralation between NYSE Composite and Wang Lee
Assuming the 90 days trading horizon NYSE Composite is expected to generate 21.91 times less return on investment than Wang Lee. But when comparing it to its historical volatility, NYSE Composite is 14.52 times less risky than Wang Lee. It trades about 0.15 of its potential returns per unit of risk. Wang Lee Group, is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 55.00 in Wang Lee Group, on September 2, 2024 and sell it today you would earn a total of 418.00 from holding Wang Lee Group, or generate 760.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Wang Lee Group,
Performance |
| Timeline |
NYSE Composite and Wang Lee Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Wang Lee Group,
Pair trading matchups for Wang Lee
Pair Trading with NYSE Composite and Wang Lee
The main advantage of trading using opposite NYSE Composite and Wang Lee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Wang Lee 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 Wang Lee will offset losses from the drop in Wang Lee's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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