Correlation Between NYSE Composite and Electrolux
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Electrolux 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 Electrolux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Electrolux AB Class, you can compare the effects of market volatilities on NYSE Composite and Electrolux 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 Electrolux. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Electrolux.
Diversification Opportunities for NYSE Composite and Electrolux
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Electrolux is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Electrolux AB Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrolux AB Class 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 Electrolux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrolux AB Class has no effect on the direction of NYSE Composite i.e., NYSE Composite and Electrolux go up and down completely randomly.
Pair Corralation between NYSE Composite and Electrolux
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Electrolux. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 4.31 times less risky than Electrolux. The index trades about -0.19 of its potential returns per unit of risk. The Electrolux AB Class is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,730 in Electrolux AB Class on February 2, 2024 and sell it today you would earn a total of 43.00 from holding Electrolux AB Class or generate 2.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Electrolux AB Class
Performance |
Timeline |
NYSE Composite and Electrolux Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Electrolux AB Class
Pair trading matchups for Electrolux
Pair Trading with NYSE Composite and Electrolux
The main advantage of trading using opposite NYSE Composite and Electrolux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Electrolux 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 Electrolux will offset losses from the drop in Electrolux's long position.NYSE Composite vs. NI Holdings | NYSE Composite vs. Mattel Inc | NYSE Composite vs. Parker Hannifin | NYSE Composite vs. Artisan Partners Asset |
Electrolux vs. Alsea SAB de | Electrolux vs. Marstons PLC | Electrolux vs. Dominos Pizza Group | Electrolux vs. Bagger Daves Burger |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |