Correlation Between NYSE Composite and Unit

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Unit 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 Unit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Unit Corporation, you can compare the effects of market volatilities on NYSE Composite and Unit 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 Unit. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Unit.

Diversification Opportunities for NYSE Composite and Unit

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between NYSE and Unit is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Unit Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unit 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 Unit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unit has no effect on the direction of NYSE Composite i.e., NYSE Composite and Unit go up and down completely randomly.
    Optimize

Pair Corralation between NYSE Composite and Unit

Assuming the 90 days trading horizon NYSE Composite is expected to generate 35.83 times less return on investment than Unit. But when comparing it to its historical volatility, NYSE Composite is 36.7 times less risky than Unit. It trades about 0.12 of its potential returns per unit of risk. Unit Corporation is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Unit Corporation on August 30, 2024 and sell it today you would earn a total of  3.00  from holding Unit Corporation or generate 10.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy65.63%
ValuesDaily Returns

NYSE Composite  vs.  Unit Corp.

 Performance 
       Timeline  

NYSE Composite and Unit Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NYSE Composite and Unit

The main advantage of trading using opposite NYSE Composite and Unit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Unit 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 Unit will offset losses from the drop in Unit's long position.
The idea behind NYSE Composite and Unit Corporation 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

Other Complementary Tools

Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets