Correlation Between NYSE Composite and FundX Aggressive
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and FundX Aggressive 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 FundX Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and FundX Aggressive ETF, you can compare the effects of market volatilities on NYSE Composite and FundX Aggressive 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 FundX Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and FundX Aggressive.
Diversification Opportunities for NYSE Composite and FundX Aggressive
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and FundX is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and FundX Aggressive ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Aggressive ETF 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 FundX Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Aggressive ETF has no effect on the direction of NYSE Composite i.e., NYSE Composite and FundX Aggressive go up and down completely randomly.
Pair Corralation between NYSE Composite and FundX Aggressive
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.44 times less return on investment than FundX Aggressive. But when comparing it to its historical volatility, NYSE Composite is 1.46 times less risky than FundX Aggressive. It trades about 0.08 of its potential returns per unit of risk. FundX Aggressive ETF is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,019 in FundX Aggressive ETF on September 3, 2024 and sell it today you would earn a total of 2,260 from holding FundX Aggressive ETF or generate 45.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. FundX Aggressive ETF
Performance |
| Timeline |
NYSE Composite and FundX Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
FundX Aggressive ETF
Pair trading matchups for FundX Aggressive
Pair Trading with NYSE Composite and FundX Aggressive
The main advantage of trading using opposite NYSE Composite and FundX Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, FundX Aggressive 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 FundX Aggressive will offset losses from the drop in FundX Aggressive's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| FundX Aggressive vs. Series Portfolios Trust | FundX Aggressive vs. FT Vest Equity | FundX Aggressive vs. Zillow Group Class | FundX Aggressive vs. Northern Lights |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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