Correlation Between EGPT and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both EGPT and NYSE Composite 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 EGPT and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EGPT and NYSE Composite, you can compare the effects of market volatilities on EGPT and NYSE Composite 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 EGPT with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of EGPT and NYSE Composite.
Diversification Opportunities for EGPT and NYSE Composite
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EGPT and NYSE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding EGPT and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and EGPT 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 EGPT are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of EGPT i.e., EGPT and NYSE Composite go up and down completely randomly.
Pair Corralation between EGPT and NYSE Composite
If you would invest 1,796,384 in NYSE Composite on March 7, 2024 and sell it today you would earn a total of 8,166 from holding NYSE Composite or generate 0.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 4.55% |
Values | Daily Returns |
EGPT vs. NYSE Composite
Performance |
Timeline |
EGPT and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
EGPT
Pair trading matchups for EGPT
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with EGPT and NYSE Composite
The main advantage of trading using opposite EGPT and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EGPT position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.EGPT vs. VanEck Africa Index | EGPT vs. Global X MSCI | EGPT vs. iShares MSCI Philippines | EGPT vs. iShares MSCI Peru |
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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 Stocks Directory module to find actively traded stocks across global markets.
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