Correlation Between New Residential and Fidelity National
Can any of the company-specific risk be diversified away by investing in both New Residential and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on New Residential and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Fidelity National.
Diversification Opportunities for New Residential and Fidelity National
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Fidelity is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of New Residential i.e., New Residential and Fidelity National go up and down completely randomly.
Pair Corralation between New Residential and Fidelity National
Assuming the 90 days trading horizon New Residential Investment is expected to generate 1.17 times more return on investment than Fidelity National. However, New Residential is 1.17 times more volatile than Fidelity National Information. It trades about 0.2 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.24 per unit of risk. If you would invest 1,062 in New Residential Investment on September 20, 2024 and sell it today you would earn a total of 41.00 from holding New Residential Investment or generate 3.86% 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. Fidelity National Information
Performance |
| Timeline |
| New Residential Inve |
| Fidelity National |
New Residential and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Fidelity National
The main advantage of trading using opposite New Residential and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| New Residential vs. Samsung Electronics Co | New Residential vs. Samsung Electronics Co | New Residential vs. Hyundai Motor | New Residential vs. Reliance Industries Ltd |
| Fidelity National vs. Federal Realty Investment | Fidelity National vs. Zoom Video Communications | Fidelity National vs. New Residential Investment | Fidelity National vs. FC Investment Trust |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |