Correlation Between New Residential and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both New Residential and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on New Residential and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Jacquet Metal.
Diversification Opportunities for New Residential and Jacquet Metal
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Jacquet is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of New Residential i.e., New Residential and Jacquet Metal go up and down completely randomly.
Pair Corralation between New Residential and Jacquet Metal
Assuming the 90 days trading horizon New Residential Investment is expected to generate 1.24 times more return on investment than Jacquet Metal. However, New Residential is 1.24 times more volatile than Jacquet Metal Service. It trades about 0.07 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.01 per unit of risk. If you would invest 689.00 in New Residential Investment on August 31, 2024 and sell it today you would earn a total of 433.00 from holding New Residential Investment or generate 62.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.5% |
| Values | Daily Returns |
New Residential Investment vs. Jacquet Metal Service
Performance |
| Timeline |
| New Residential Inve |
| Jacquet Metal Service |
New Residential and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Jacquet Metal
The main advantage of trading using opposite New Residential and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| New Residential vs. Auction Technology Group | New Residential vs. Check Point Software | New Residential vs. International Biotechnology Trust | New Residential vs. Pfeiffer Vacuum Technology |
| Jacquet Metal vs. The Investment | Jacquet Metal vs. New Residential Investment | Jacquet Metal vs. Oakley Capital Investments | Jacquet Metal vs. Tatton Asset Management |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |