Correlation Between NYSE Composite and 22nd Century
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and 22nd Century 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 22nd Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and 22nd Century Group, you can compare the effects of market volatilities on NYSE Composite and 22nd Century 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 22nd Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and 22nd Century.
Diversification Opportunities for NYSE Composite and 22nd Century
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and 22nd is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and 22nd Century Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 22nd Century Group 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 22nd Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 22nd Century Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and 22nd Century go up and down completely randomly.
Pair Corralation between NYSE Composite and 22nd Century
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.04 times more return on investment than 22nd Century. However, NYSE Composite is 23.48 times less risky than 22nd Century. It trades about 0.17 of its potential returns per unit of risk. 22nd Century Group is currently generating about -0.04 per unit of risk. If you would invest 1,547,520 in NYSE Composite on February 1, 2024 and sell it today you would earn a total of 212,814 from holding NYSE Composite or generate 13.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. 22nd Century Group
Performance |
Timeline |
NYSE Composite and 22nd Century Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
22nd Century Group
Pair trading matchups for 22nd Century
Pair Trading with NYSE Composite and 22nd Century
The main advantage of trading using opposite NYSE Composite and 22nd Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, 22nd Century 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 22nd Century will offset losses from the drop in 22nd Century's long position.NYSE Composite vs. CECO Environmental Corp | NYSE Composite vs. Air Lease | NYSE Composite vs. Artisan Partners Asset | NYSE Composite vs. Iris Acquisition Corp |
22nd Century vs. Green Cures Botanical | 22nd Century vs. Easton Pharmaceutica | 22nd Century vs. Rocky Mountain High | 22nd Century vs. American Green |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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