Correlation Between NYSE Composite and FT Vest
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and FT Vest 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 FT Vest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and FT Vest Equity, you can compare the effects of market volatilities on NYSE Composite and FT Vest 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 FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and FT Vest.
Diversification Opportunities for NYSE Composite and FT Vest
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and XIJN is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and FT Vest Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest Equity 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 FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest Equity has no effect on the direction of NYSE Composite i.e., NYSE Composite and FT Vest go up and down completely randomly.
Pair Corralation between NYSE Composite and FT Vest
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.77 times more return on investment than FT Vest. However, NYSE Composite is 5.77 times more volatile than FT Vest Equity. It trades about 0.42 of its potential returns per unit of risk. FT Vest Equity is currently generating about 0.54 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. FT Vest Equity
Performance |
| Timeline |
NYSE Composite and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
FT Vest Equity
Pair trading matchups for FT Vest
Pair Trading with NYSE Composite and FT Vest
The main advantage of trading using opposite NYSE Composite and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| FT Vest vs. FT Vest Equity | FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest vs. Matthews China Discovery |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |