Two Equities Correlation Analysis
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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 Nestle SA and NYSE Composite
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nestle and NYSE is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nestle SA and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Nestle SA 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 Nestle SA 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 Nestle SA i.e., Nestle SA and NYSE Composite go up and down completely randomly.
Pair Corralation between Nestle SA and NYSE Composite
Assuming the 90 days horizon Nestle SA is expected to under-perform the NYSE Composite. In addition to that, Nestle SA is 1.38 times more volatile than NYSE Composite. It trades about -0.01 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.03 per unit of volatility. If you would invest 1,556,656 in NYSE Composite on January 26, 2024 and sell it today you would earn a total of 219,152 from holding NYSE Composite or generate 14.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Nestle SA vs. NYSE Composite
Performance |
Timeline |
Nestle SA and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Nestle SA
Pair trading matchups for Nestle SA
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Nestle SA and NYSE Composite
The main advantage of trading using opposite Nestle SA and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nestle SA 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.Nestle SA vs. Kellanova | Nestle SA vs. Lancaster Colony | Nestle SA vs. The A2 Milk | Nestle SA vs. Artisan Consumer Goods |
NYSE Composite vs. Nike Inc | NYSE Composite vs. Zoom Video Communications | NYSE Composite vs. Vera Bradley | NYSE Composite vs. Torm PLC Class |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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