Correlation Between New Residential and IShares Physical
Can any of the company-specific risk be diversified away by investing in both New Residential and IShares Physical 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 IShares Physical 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 iShares Physical Silver, you can compare the effects of market volatilities on New Residential and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and IShares Physical.
Diversification Opportunities for New Residential and IShares Physical
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and IShares is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of New Residential i.e., New Residential and IShares Physical go up and down completely randomly.
Pair Corralation between New Residential and IShares Physical
Assuming the 90 days trading horizon New Residential is expected to generate 1.55 times less return on investment than IShares Physical. But when comparing it to its historical volatility, New Residential Investment is 1.4 times less risky than IShares Physical. It trades about 0.06 of its potential returns per unit of risk. iShares Physical Silver is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,273 in iShares Physical Silver on September 2, 2024 and sell it today you would earn a total of 660.00 from holding iShares Physical Silver or generate 29.04% 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. iShares Physical Silver
Performance |
| Timeline |
| New Residential Inve |
| iShares Physical Silver |
New Residential and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and IShares Physical
The main advantage of trading using opposite New Residential and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.| New Residential vs. Uniper SE | New Residential vs. Mulberry Group PLC | New Residential vs. London Security Plc | New Residential vs. Triad Group PLC |
| IShares Physical vs. Sabien Technology Group | IShares Physical vs. New Residential Investment | IShares Physical vs. Take Two Interactive Software | IShares Physical vs. Auction Technology Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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