Correlation Between New Residential and Kaufman Et
Can any of the company-specific risk be diversified away by investing in both New Residential and Kaufman Et 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 New Residential and Kaufman Et into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and Kaufman Et Broad, you can compare the effects of market volatilities on New Residential and Kaufman Et 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 New Residential with a short position of Kaufman Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Kaufman Et.
Diversification Opportunities for New Residential and Kaufman Et
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Kaufman is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Kaufman Et Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Et Broad and New Residential 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 New Residential Investment are associated (or correlated) with Kaufman Et. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Et Broad has no effect on the direction of New Residential i.e., New Residential and Kaufman Et go up and down completely randomly.
Pair Corralation between New Residential and Kaufman Et
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.73 times more return on investment than Kaufman Et. However, New Residential Investment is 1.36 times less risky than Kaufman Et. It trades about 0.2 of its potential returns per unit of risk. Kaufman Et Broad is currently generating about -0.02 per unit of risk. If you would invest 1,068 in New Residential Investment on October 28, 2024 and sell it today you would earn a total of 56.00 from holding New Residential Investment or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. Kaufman Et Broad
Performance |
| Timeline |
| New Residential Inve |
| Kaufman Et Broad |
New Residential and Kaufman Et Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Kaufman Et
The main advantage of trading using opposite New Residential and Kaufman Et positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Kaufman Et 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 Kaufman Et will offset losses from the drop in Kaufman Et's long position.| New Residential vs. Ameriprise Financial | New Residential vs. BE Semiconductor Industries | New Residential vs. Raymond James Financial | New Residential vs. Ally Financial |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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