Correlation Between New Residential and Roebuck Food
Can any of the company-specific risk be diversified away by investing in both New Residential and Roebuck Food 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 Roebuck Food 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 Roebuck Food Group, you can compare the effects of market volatilities on New Residential and Roebuck Food 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 Roebuck Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Roebuck Food.
Diversification Opportunities for New Residential and Roebuck Food
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Roebuck is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Roebuck Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roebuck Food Group 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 Roebuck Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roebuck Food Group has no effect on the direction of New Residential i.e., New Residential and Roebuck Food go up and down completely randomly.
Pair Corralation between New Residential and Roebuck Food
Assuming the 90 days trading horizon New Residential Investment is expected to generate 1.04 times more return on investment than Roebuck Food. However, New Residential is 1.04 times more volatile than Roebuck Food Group. It trades about 0.05 of its potential returns per unit of risk. Roebuck Food Group is currently generating about 0.04 per unit of risk. If you would invest 695.00 in New Residential Investment on September 22, 2024 and sell it today you would earn a total of 400.00 from holding New Residential Investment or generate 57.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
New Residential Investment vs. Roebuck Food Group
Performance |
| Timeline |
| New Residential Inve |
| Roebuck Food Group |
New Residential and Roebuck Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Roebuck Food
The main advantage of trading using opposite New Residential and Roebuck Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Roebuck Food 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 Roebuck Food will offset losses from the drop in Roebuck Food'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 |
| Roebuck Food vs. Zegona Communications Plc | Roebuck Food vs. New Residential Investment | Roebuck Food vs. Qurate Retail Series | Roebuck Food 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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