Correlation Between New Residential and Futura Medical
Can any of the company-specific risk be diversified away by investing in both New Residential and Futura Medical 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 Futura Medical 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 Futura Medical, you can compare the effects of market volatilities on New Residential and Futura Medical 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 Futura Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Futura Medical.
Diversification Opportunities for New Residential and Futura Medical
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Futura is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Futura Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futura Medical 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 Futura Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futura Medical has no effect on the direction of New Residential i.e., New Residential and Futura Medical go up and down completely randomly.
Pair Corralation between New Residential and Futura Medical
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.62 times more return on investment than Futura Medical. However, New Residential Investment is 1.62 times less risky than Futura Medical. It trades about 0.04 of its potential returns per unit of risk. Futura Medical is currently generating about -0.01 per unit of risk. If you would invest 753.00 in New Residential Investment on October 13, 2024 and sell it today you would earn a total of 324.00 from holding New Residential Investment or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
New Residential Investment vs. Futura Medical
Performance |
| Timeline |
| New Residential Inve |
| Futura Medical |
New Residential and Futura Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Futura Medical
The main advantage of trading using opposite New Residential and Futura Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Futura Medical 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 Futura Medical will offset losses from the drop in Futura Medical's long position.| New Residential vs. Dentsply Sirona | New Residential vs. Iron Mountain | New Residential vs. Bankers Investment Trust | New Residential vs. Mineral Financial Investments |
| Futura Medical vs. Costco Wholesale Corp | Futura Medical vs. Samsung Electronics Co | Futura Medical vs. New Residential Investment | Futura Medical vs. Monks 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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