Correlation Between NEO PERFORMMAT and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both NEO PERFORMMAT 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 NEO PERFORMMAT and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEO PERFORMMAT and NYSE Composite, you can compare the effects of market volatilities on NEO PERFORMMAT 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 NEO PERFORMMAT with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEO PERFORMMAT and NYSE Composite.
Diversification Opportunities for NEO PERFORMMAT and NYSE Composite
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NEO and NYSE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NEO PERFORMMAT and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and NEO PERFORMMAT 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 NEO PERFORMMAT 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 NEO PERFORMMAT i.e., NEO PERFORMMAT and NYSE Composite go up and down completely randomly.
Pair Corralation between NEO PERFORMMAT and NYSE Composite
Assuming the 90 days horizon NEO PERFORMMAT is expected to under-perform the NYSE Composite. In addition to that, NEO PERFORMMAT is 4.47 times more volatile than NYSE Composite. It trades about -0.01 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.05 per unit of volatility. If you would invest 1,774,870 in NYSE Composite on March 4, 2024 and sell it today you would earn a total of 33,499 from holding NYSE Composite or generate 1.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
NEO PERFORMMAT vs. NYSE Composite
Performance |
Timeline |
NEO PERFORMMAT and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
NEO PERFORMMAT
Pair trading matchups for NEO PERFORMMAT
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with NEO PERFORMMAT and NYSE Composite
The main advantage of trading using opposite NEO PERFORMMAT and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEO PERFORMMAT 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.NEO PERFORMMAT vs. CITIUS RESOURCES LS 005 | NEO PERFORMMAT vs. Superior Plus Corp | NEO PERFORMMAT vs. SIVERS SEMICONDUCTORS AB | NEO PERFORMMAT vs. Talanx AG |
NYSE Composite vs. Virco Manufacturing | NYSE Composite vs. Coupang LLC | NYSE Composite vs. Summit Hotel Properties | NYSE Composite vs. BBB Foods |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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