Two Equities Correlation Analysis
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ASBFY
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Associated British and NYSE Composite
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Associated and NYSE is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Associated British 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 Associated British Foods 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 Associated British i.e., Associated British and NYSE Composite go up and down completely randomly.
Pair Corralation between Associated British and NYSE Composite
Assuming the 90 days horizon Associated British Foods is expected to generate 2.29 times more return on investment than NYSE Composite. However, Associated British is 2.29 times more volatile than NYSE Composite. It trades about 0.09 of its potential returns per unit of risk. NYSE Composite is currently generating about 0.11 per unit of risk. If you would invest 2,834 in Associated British Foods on January 21, 2024 and sell it today you would earn a total of 210.00 from holding Associated British Foods or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated British Foods vs. NYSE Composite
Performance |
| Timeline |
Associated British and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Associated British Foods
Pair trading matchups for Associated British
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Associated British and NYSE Composite
The main advantage of trading using opposite Associated British and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British 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.| Associated British vs. Artisan Consumer Goods | Associated British vs. Altavoz Entertainment | Associated British vs. Avi Ltd ADR | Associated British vs. The a2 Milk |
| NYSE Composite vs. BK Technologies | NYSE Composite vs. Ryanair Holdings PLC | NYSE Composite vs. Nok Airlines Public | NYSE Composite vs. FormFactor |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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