Correlation Between NYSE Composite and Tuttle Capital

Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Tuttle Capital 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 Tuttle Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NYSE Composite and Tuttle Capital Management, you can compare the effects of market volatilities on NYSE Composite and Tuttle Capital 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 Tuttle Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Tuttle Capital.

Diversification Opportunities for NYSE Composite and Tuttle Capital

0.13

Correlation Coefficient

NYSE Composite  Tuttle Capital

Average diversification

The 3 months correlation between NYSE and Tuttle is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Tuttle Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tuttle Capital Management 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 Tuttle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tuttle Capital Management has no effect on the direction of NYSE Composite i.e., NYSE Composite and Tuttle Capital go up and down completely randomly.

Pair Corralation between NYSE Composite and Tuttle Capital

If you would invest  1,548,778  in NYSE Composite on October 5, 2024 and sell it today you would earn a total of  360,764  from holding NYSE Composite or generate 23.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.65%
Values	Daily Returns

NYSE Composite  vs.  Tuttle Capital Management

Pair Trading with NYSE Composite and Tuttle Capital

The main advantage of trading using opposite NYSE Composite and Tuttle Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Tuttle Capital 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 Tuttle Capital will offset losses from the drop in Tuttle Capital's long position.

The idea behind NYSE Composite and Tuttle Capital Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.