Correlation Between NYSE Composite and Westcore Plus
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Westcore Plus 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 Westcore Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Westcore Plus Bond, you can compare the effects of market volatilities on NYSE Composite and Westcore Plus 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 Westcore Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Westcore Plus.
Diversification Opportunities for NYSE Composite and Westcore Plus
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Westcore is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Westcore Plus Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Plus Bond 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 Westcore Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Plus Bond has no effect on the direction of NYSE Composite i.e., NYSE Composite and Westcore Plus go up and down completely randomly.
Pair Corralation between NYSE Composite and Westcore Plus
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.35 times more return on investment than Westcore Plus. However, NYSE Composite is 2.35 times more volatile than Westcore Plus Bond. It trades about 0.04 of its potential returns per unit of risk. Westcore Plus Bond is currently generating about 0.04 per unit of risk. If you would invest 1,554,588 in NYSE Composite on January 17, 2025 and sell it today you would earn a total of 269,977 from holding NYSE Composite or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Westcore Plus Bond
Performance |
| Timeline |
NYSE Composite and Westcore Plus Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Westcore Plus Bond
Pair trading matchups for Westcore Plus
Pair Trading with NYSE Composite and Westcore Plus
The main advantage of trading using opposite NYSE Composite and Westcore Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Westcore Plus 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 Westcore Plus will offset losses from the drop in Westcore Plus' long position.| NYSE Composite vs. Perseus Mining Limited | NYSE Composite vs. Copperbank Resources Corp | NYSE Composite vs. Catalyst Metals Limited | NYSE Composite vs. Life Time Group |
| Westcore Plus vs. Large Cap Fund | Westcore Plus vs. James Balanced Golden | Westcore Plus vs. Aberdeen Global High | Westcore Plus vs. Loomis Sayles Bond |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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