Correlation Between NYSE Composite and ACV Auctions
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and ACV Auctions 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 ACV Auctions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and ACV Auctions, you can compare the effects of market volatilities on NYSE Composite and ACV Auctions 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 ACV Auctions. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and ACV Auctions.
Diversification Opportunities for NYSE Composite and ACV Auctions
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and ACV is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and ACV Auctions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACV Auctions 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 ACV Auctions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACV Auctions has no effect on the direction of NYSE Composite i.e., NYSE Composite and ACV Auctions go up and down completely randomly.
Pair Corralation between NYSE Composite and ACV Auctions
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.24 times more return on investment than ACV Auctions. However, NYSE Composite is 4.21 times less risky than ACV Auctions. It trades about 0.05 of its potential returns per unit of risk. ACV Auctions is currently generating about -0.18 per unit of risk. If you would invest 1,907,793 in NYSE Composite on December 28, 2024 and sell it today you would earn a total of 45,679 from holding NYSE Composite or generate 2.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. ACV Auctions
Performance |
Timeline |
NYSE Composite and ACV Auctions Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
ACV Auctions
Pair trading matchups for ACV Auctions
Pair Trading with NYSE Composite and ACV Auctions
The main advantage of trading using opposite NYSE Composite and ACV Auctions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, ACV Auctions 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 ACV Auctions will offset losses from the drop in ACV Auctions' long position.NYSE Composite vs. Melco Resorts Entertainment | NYSE Composite vs. SLR Investment Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Greentown Management Holdings |
ACV Auctions vs. CarGurus | ACV Auctions vs. KAR Auction Services | ACV Auctions vs. Kingsway Financial Services | ACV Auctions vs. Driven Brands Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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