Correlation Between NYSE Composite and Quaker Investment
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Quaker Investment 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 Quaker Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Quaker Investment Trust, you can compare the effects of market volatilities on NYSE Composite and Quaker Investment 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 Quaker Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Quaker Investment.
Diversification Opportunities for NYSE Composite and Quaker Investment
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Quaker is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Quaker Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Investment Trust 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 Quaker Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Investment Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and Quaker Investment go up and down completely randomly.
Pair Corralation between NYSE Composite and Quaker Investment
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.27 times less return on investment than Quaker Investment. In addition to that, NYSE Composite is 1.57 times more volatile than Quaker Investment Trust. It trades about 0.02 of its total potential returns per unit of risk. Quaker Investment Trust is currently generating about 0.18 per unit of volatility. If you would invest 1,665 in Quaker Investment Trust on March 6, 2024 and sell it today you would earn a total of 25.50 from holding Quaker Investment Trust or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
NYSE Composite vs. Quaker Investment Trust
Performance |
| Timeline |
NYSE Composite and Quaker Investment Volatility Contrast
Predicted Return Density |
| Returns |