Correlation Between Small Pany and New York

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

Diversification Opportunities for Small Pany and New York

-0.92
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Small and New is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Small Pany Growth and New York Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Bond and Small Pany 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 Small Pany Growth are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Bond has no effect on the direction of Small Pany i.e., Small Pany and New York go up and down completely randomly.

Pair Corralation between Small Pany and New York

Assuming the 90 days horizon Small Pany Growth is expected to generate 4.33 times more return on investment than New York. However, Small Pany is 4.33 times more volatile than New York Bond. It trades about 0.08 of its potential returns per unit of risk. New York Bond is currently generating about 0.01 per unit of risk. If you would invest  799.00  in Small Pany Growth on September 20, 2024 and sell it today you would earn a total of  936.00  from holding Small Pany Growth or generate 117.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Small Pany Growth  vs.  New York Bond

 Performance 
       Timeline  
Small Pany Growth 

Risk-Adjusted Performance

26 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Small Pany Growth are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Small Pany showed solid returns over the last few months and may actually be approaching a breakup point.
New York Bond 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days New York Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Small Pany and New York Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Small Pany and New York

The main advantage of trading using opposite Small Pany and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Pany position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.
The idea behind Small Pany Growth and New York Bond 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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