Correlation Between SSH Communications and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both SSH Communications and NYSE Composite 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 SSH Communications and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSH Communications Security and NYSE Composite, you can compare the effects of market volatilities on SSH Communications and NYSE Composite 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 SSH Communications with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSH Communications and NYSE Composite.
Diversification Opportunities for SSH Communications and NYSE Composite
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SSH and NYSE is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding SSH Communications Security and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and SSH Communications 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 SSH Communications Security 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 SSH Communications i.e., SSH Communications and NYSE Composite go up and down completely randomly.
Pair Corralation between SSH Communications and NYSE Composite
Assuming the 90 days trading horizon SSH Communications Security is expected to generate 3.61 times more return on investment than NYSE Composite. However, SSH Communications is 3.61 times more volatile than NYSE Composite. It trades about -0.02 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.12 per unit of risk. If you would invest 134.00 in SSH Communications Security on February 5, 2024 and sell it today you would lose (2.00) from holding SSH Communications Security or give up 1.49% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
SSH Communications Security vs. NYSE Composite
Performance |
Timeline |
SSH Communications and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
SSH Communications Security
Pair trading matchups for SSH Communications
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with SSH Communications and NYSE Composite
The main advantage of trading using opposite SSH Communications and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSH Communications 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.SSH Communications vs. Tokmanni Group Oyj | SSH Communications vs. Kemira Oyj | SSH Communications vs. Valmet Oyj | SSH Communications vs. Etteplan Oyj |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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