Correlation Between Strauss and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Strauss and NYSE Composite 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 Strauss and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strauss Group and NYSE Composite, you can compare the effects of market volatilities on Strauss and NYSE Composite 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 Strauss with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strauss and NYSE Composite.
Diversification Opportunities for Strauss and NYSE Composite
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Strauss and NYSE is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Strauss 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 Strauss Group are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Strauss i.e., Strauss and NYSE Composite go up and down completely randomly.
Pair Corralation between Strauss and NYSE Composite
Assuming the 90 days horizon Strauss Group is expected to under-perform the NYSE Composite. In addition to that, Strauss is 5.9 times more volatile than NYSE Composite. It trades about -0.21 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.16 per unit of volatility. If you would invest 1,814,664 in NYSE Composite on February 3, 2024 and sell it today you would lose (44,759) from holding NYSE Composite or give up 2.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Strauss Group vs. NYSE Composite
Performance |
Timeline |
Strauss and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Strauss Group
Pair trading matchups for Strauss
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Strauss and NYSE Composite
The main advantage of trading using opposite Strauss and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strauss position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Strauss vs. Meta Platforms | Strauss vs. Ralph Lauren Corp | Strauss vs. Braxia Scientific Corp | Strauss vs. Terran Orbital Corp |
NYSE Composite vs. Amkor Technology | NYSE Composite vs. MACOM Technology Solutions | NYSE Composite vs. Weibo Corp | NYSE Composite vs. NETGEAR |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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