Correlation Between NYSE Composite and Harsco

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

By analyzing existing cross correlation between NYSE Composite and Harsco 575 percent, you can compare the effects of market volatilities on NYSE Composite and Harsco 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 Harsco. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Harsco.

Diversification Opportunities for NYSE Composite and Harsco

0.21

Correlation Coefficient

NYSE Composite  Harsco

Modest diversification

The 3 months correlation between NYSE and Harsco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Harsco 575 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harsco 575 percent 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 Harsco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harsco 575 percent has no effect on the direction of NYSE Composite i.e., NYSE Composite and Harsco go up and down completely randomly.

Pair Corralation between NYSE Composite and Harsco

Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.39 times more return on investment than Harsco. However, NYSE Composite is 2.55 times less risky than Harsco. It trades about 0.06 of its potential returns per unit of risk. Harsco 575 percent is currently generating about 0.02 per unit of risk. If you would invest  1,783,107  in NYSE Composite on September 24, 2024 and sell it today you would earn a total of  128,837  from holding NYSE Composite or generate 7.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	87.95%
Values	Daily Returns

NYSE Composite  vs.  Harsco 575 percent

Pair Trading with NYSE Composite and Harsco

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

The idea behind NYSE Composite and Harsco 575 percent 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.