Correlation Between NYSE Composite and Whitbread PLC
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Whitbread PLC 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 Whitbread PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Whitbread PLC ADR, you can compare the effects of market volatilities on NYSE Composite and Whitbread PLC 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 Whitbread PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Whitbread PLC.
Diversification Opportunities for NYSE Composite and Whitbread PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Whitbread is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Whitbread PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread PLC ADR 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 Whitbread PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread PLC ADR has no effect on the direction of NYSE Composite i.e., NYSE Composite and Whitbread PLC go up and down completely randomly.
Pair Corralation between NYSE Composite and Whitbread PLC
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.37 times more return on investment than Whitbread PLC. However, NYSE Composite is 2.67 times less risky than Whitbread PLC. It trades about 0.24 of its potential returns per unit of risk. Whitbread PLC ADR is currently generating about -0.34 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Whitbread PLC ADR
Performance |
| Timeline |
NYSE Composite and Whitbread PLC Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Whitbread PLC ADR
Pair trading matchups for Whitbread PLC
Pair Trading with NYSE Composite and Whitbread PLC
The main advantage of trading using opposite NYSE Composite and Whitbread PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Whitbread PLC 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 Whitbread PLC will offset losses from the drop in Whitbread PLC's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Whitbread PLC vs. Marriott International | Whitbread PLC vs. Hilton Worldwide Holdings | Whitbread PLC vs. InterContinental Hotels Group | Whitbread PLC vs. Accor SA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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