Correlation Between NYSE Composite and Mesoblast
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mesoblast 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 Mesoblast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mesoblast, you can compare the effects of market volatilities on NYSE Composite and Mesoblast 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 Mesoblast. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mesoblast.
Diversification Opportunities for NYSE Composite and Mesoblast
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Mesoblast is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mesoblast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesoblast 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 Mesoblast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesoblast has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mesoblast go up and down completely randomly.
Pair Corralation between NYSE Composite and Mesoblast
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.22 times more return on investment than Mesoblast. However, NYSE Composite is 4.62 times less risky than Mesoblast. It trades about 0.02 of its potential returns per unit of risk. Mesoblast is currently generating about -0.23 per unit of risk. If you would invest 1,907,793 in NYSE Composite on December 30, 2024 and sell it today you would earn a total of 19,237 from holding NYSE Composite or generate 1.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.77% |
Values | Daily Returns |
NYSE Composite vs. Mesoblast
Performance |
Timeline |
NYSE Composite and Mesoblast Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mesoblast
Pair trading matchups for Mesoblast
Pair Trading with NYSE Composite and Mesoblast
The main advantage of trading using opposite NYSE Composite and Mesoblast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mesoblast 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 Mesoblast will offset losses from the drop in Mesoblast's long position.NYSE Composite vs. Corby Spirit and | NYSE Composite vs. Church Dwight | NYSE Composite vs. Nascent Wine | NYSE Composite vs. Crocs Inc |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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