Correlation Between NYSE Composite and Myers Industries
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Myers Industries 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 Myers Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Myers Industries, you can compare the effects of market volatilities on NYSE Composite and Myers Industries 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 Myers Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Myers Industries.
Diversification Opportunities for NYSE Composite and Myers Industries
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Myers is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries 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 Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of NYSE Composite i.e., NYSE Composite and Myers Industries go up and down completely randomly.
Pair Corralation between NYSE Composite and Myers Industries
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.21 times less return on investment than Myers Industries. But when comparing it to its historical volatility, NYSE Composite is 2.94 times less risky than Myers Industries. It trades about 0.09 of its potential returns per unit of risk. Myers Industries is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,895 in Myers Industries on February 2, 2024 and sell it today you would earn a total of 361.00 from holding Myers Industries or generate 19.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Myers Industries
Performance |
Timeline |
NYSE Composite and Myers Industries Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Myers Industries
Pair trading matchups for Myers Industries
Pair Trading with NYSE Composite and Myers Industries
The main advantage of trading using opposite NYSE Composite and Myers Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Myers Industries 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 Myers Industries will offset losses from the drop in Myers Industries' long position.NYSE Composite vs. NI Holdings | NYSE Composite vs. Mattel Inc | NYSE Composite vs. Parker Hannifin | NYSE Composite vs. Artisan Partners Asset |
Myers Industries vs. Greif Bros | Myers Industries vs. Reynolds Consumer Products | Myers Industries vs. Silgan Holdings | Myers Industries vs. O I Glass |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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