Correlation Between NYSE Composite and Mansfelder Metals

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

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

Diversification Opportunities for NYSE Composite and Mansfelder Metals

0.0

Correlation Coefficient

NYSE Composite  Mansfelder Metals

Pay attention - limited upside

The 3 months correlation between NYSE and Mansfelder is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mansfelder Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mansfelder Metals 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 Mansfelder Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mansfelder Metals has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mansfelder Metals go up and down completely randomly.

Pair Corralation between NYSE Composite and Mansfelder Metals

If you would invest  0.01  in Mansfelder Metals on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Mansfelder Metals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

NYSE Composite  vs.  Mansfelder Metals

Pair Trading with NYSE Composite and Mansfelder Metals

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

The idea behind NYSE Composite and Mansfelder Metals 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..