Correlation Between US Global and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global GO and NYSE Composite, you can compare the effects of market volatilities on US Global 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 US Global with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and NYSE Composite.
Diversification Opportunities for US Global and NYSE Composite
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GOAU and NYSE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding US Global GO and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and US Global 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 US Global GO 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 US Global i.e., US Global and NYSE Composite go up and down completely randomly.
Pair Corralation between US Global and NYSE Composite
Given the investment horizon of 90 days US Global GO is expected to generate 3.21 times more return on investment than NYSE Composite. However, US Global is 3.21 times more volatile than NYSE Composite. It trades about 0.38 of its potential returns per unit of risk. NYSE Composite is currently generating about 0.39 per unit of risk. If you would invest 1,836 in US Global GO on February 20, 2024 and sell it today you would earn a total of 278.50 from holding US Global GO or generate 15.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
US Global GO vs. NYSE Composite
Performance |
Timeline |
US Global and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
US Global GO
Pair trading matchups for US Global
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with US Global and NYSE Composite
The main advantage of trading using opposite US Global and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.US Global vs. ETFMG Prime Junior | US Global vs. Sprott Junior Gold | US Global vs. Global X Gold | US Global vs. Optica Rare Earths |
NYSE Composite vs. Universal Technical Institute | NYSE Composite vs. American Airlines Group | NYSE Composite vs. Global Crossing Airlines | NYSE Composite vs. Pearson PLC ADR |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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