Correlation Between NYSE Composite and Great Wall
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Great Wall 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 Great Wall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Great Wall Motor, you can compare the effects of market volatilities on NYSE Composite and Great Wall 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 Great Wall. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Great Wall.
Diversification Opportunities for NYSE Composite and Great Wall
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Great is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Great Wall Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wall Motor 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 Great Wall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wall Motor has no effect on the direction of NYSE Composite i.e., NYSE Composite and Great Wall go up and down completely randomly.
Pair Corralation between NYSE Composite and Great Wall
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than Great Wall. However, NYSE Composite is 4.04 times less risky than Great Wall. It trades about 0.19 of its potential returns per unit of risk. Great Wall Motor is currently generating about 0.0 per unit of risk. If you would invest 1,909,542 in NYSE Composite on December 2, 2024 and sell it today you would earn a total of 93,277 from holding NYSE Composite or generate 4.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 97.5% |
Values | Daily Returns |
NYSE Composite vs. Great Wall Motor
Performance |
Timeline |
NYSE Composite and Great Wall Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Great Wall Motor
Pair trading matchups for Great Wall
Pair Trading with NYSE Composite and Great Wall
The main advantage of trading using opposite NYSE Composite and Great Wall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Great Wall 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 Great Wall will offset losses from the drop in Great Wall's long position.NYSE Composite vs. Inflection Point Acquisition | NYSE Composite vs. Cardinal Health | NYSE Composite vs. Futuretech II Acquisition | NYSE Composite vs. Black Spade Acquisition |
Great Wall vs. Mitsubishi Motors Corp | Great Wall vs. Geely Automobile Holdings | Great Wall vs. Hyundai Motor Co | Great Wall vs. Volkswagen AG 110 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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