Correlation Between NYSE Composite and CCL Industries
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and CCL Industries 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 CCL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CCL Industries, you can compare the effects of market volatilities on NYSE Composite and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CCL Industries.
Diversification Opportunities for NYSE Composite and CCL Industries
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and CCL is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of NYSE Composite i.e., NYSE Composite and CCL Industries go up and down completely randomly.
Pair Corralation between NYSE Composite and CCL Industries
Assuming the 90 days trading horizon NYSE Composite is expected to generate 19.67 times less return on investment than CCL Industries. But when comparing it to its historical volatility, NYSE Composite is 2.66 times less risky than CCL Industries. It trades about 0.02 of its potential returns per unit of risk. CCL Industries is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,944 in CCL Industries on December 2, 2024 and sell it today you would earn a total of 167.00 from holding CCL Industries or generate 3.38% 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. CCL Industries
Performance |
Timeline |
NYSE Composite and CCL Industries Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
CCL Industries
Pair trading matchups for CCL Industries
Pair Trading with NYSE Composite and CCL Industries
The main advantage of trading using opposite NYSE Composite and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.NYSE Composite vs. Jerash Holdings | NYSE Composite vs. European Wax Center | NYSE Composite vs. Ralph Lauren Corp | NYSE Composite vs. Toro Co |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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