Correlation Between NYSE Composite and SEB SA
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and SEB SA 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 SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and SEB SA, you can compare the effects of market volatilities on NYSE Composite and SEB SA 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 SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and SEB SA.
Diversification Opportunities for NYSE Composite and SEB SA
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and SEB is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA 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 SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of NYSE Composite i.e., NYSE Composite and SEB SA go up and down completely randomly.
Pair Corralation between NYSE Composite and SEB SA
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than SEB SA. However, NYSE Composite is 3.95 times less risky than SEB SA. It trades about 0.02 of its potential returns per unit of risk. SEB SA is currently generating about -0.08 per unit of risk. If you would invest 1,999,882 in NYSE Composite on December 2, 2024 and sell it today you would earn a total of 2,937 from holding NYSE Composite or generate 0.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. SEB SA
Performance |
Timeline |
NYSE Composite and SEB SA Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
SEB SA
Pair trading matchups for SEB SA
Pair Trading with NYSE Composite and SEB SA
The main advantage of trading using opposite NYSE Composite and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, SEB SA 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 SEB SA will offset losses from the drop in SEB SA's long position.NYSE Composite vs. Jerash Holdings | NYSE Composite vs. European Wax Center | NYSE Composite vs. Ralph Lauren Corp | NYSE Composite vs. Toro Co |
SEB SA vs. POSCO Holdings | SEB SA vs. Summit Environmental | SEB SA vs. Maanshan Iron Steel | SEB SA vs. Aluminum of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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