Correlation Between NYSE Composite and Ensign
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Ensign 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 Ensign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and The Ensign Group, you can compare the effects of market volatilities on NYSE Composite and Ensign 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 Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ensign.
Diversification Opportunities for NYSE Composite and Ensign
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Ensign is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and The Ensign Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Group 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 Ensign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Ensign go up and down completely randomly.
Pair Corralation between NYSE Composite and Ensign
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.53 times more return on investment than Ensign. However, NYSE Composite is 1.89 times less risky than Ensign. It trades about 0.13 of its potential returns per unit of risk. The Ensign Group is currently generating about 0.01 per unit of risk. If you would invest 1,783,107 in NYSE Composite on February 27, 2024 and sell it today you would earn a total of 27,953 from holding NYSE Composite or generate 1.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
NYSE Composite vs. The Ensign Group
Performance |
Timeline |
NYSE Composite and Ensign Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
The Ensign Group
Pair trading matchups for Ensign
Pair Trading with NYSE Composite and Ensign
The main advantage of trading using opposite NYSE Composite and Ensign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Ensign 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 Ensign will offset losses from the drop in Ensign's long position.NYSE Composite vs. Burlington Stores | NYSE Composite vs. Figs Inc | NYSE Composite vs. Barrick Gold Corp | NYSE Composite vs. Levi Strauss Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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