Correlation Between Tapestry and NYSE Composite

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Tapestry 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 Tapestry and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tapestry and NYSE Composite, you can compare the effects of market volatilities on Tapestry 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 Tapestry with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tapestry and NYSE Composite.

Diversification Opportunities for Tapestry and NYSE Composite

  Correlation Coefficient

Weak diversification

The 3 months correlation between Tapestry and NYSE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tapestry and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Tapestry 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 Tapestry 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 Tapestry i.e., Tapestry and NYSE Composite go up and down completely randomly.

Pair Corralation between Tapestry and NYSE Composite

Considering the 90-day investment horizon Tapestry is expected to generate 3.99 times more return on investment than NYSE Composite. However, Tapestry is 3.99 times more volatile than NYSE Composite. It trades about 0.16 of its potential returns per unit of risk. NYSE Composite is currently generating about 0.0 per unit of risk. If you would invest  3,845  in Tapestry on March 8, 2023 and sell it today you would earn a total of  377.50  from holding Tapestry or generate 9.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Tapestry  vs.  NYSE Composite

 Performance (%) 

Tapestry and NYSE Composite Volatility Contrast

   Predicted Return Density   

Pair Trading with Tapestry and NYSE Composite

The main advantage of trading using opposite Tapestry and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tapestry 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.
The idea behind Tapestry and NYSE Composite pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Money Managers
Screen money managers from public funds and ETFs managed around the world
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
CEO Directory
Screen CEOs from public companies around the world
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity