Correlation Between New Residential and Standard Chartered
Can any of the company-specific risk be diversified away by investing in both New Residential and Standard Chartered 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 Standard Chartered 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 Standard Chartered PLC, you can compare the effects of market volatilities on New Residential and Standard Chartered 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 Standard Chartered. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Standard Chartered.
Diversification Opportunities for New Residential and Standard Chartered
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Standard is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Standard Chartered PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Chartered PLC 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 Standard Chartered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Chartered PLC has no effect on the direction of New Residential i.e., New Residential and Standard Chartered go up and down completely randomly.
Pair Corralation between New Residential and Standard Chartered
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.69 times more return on investment than Standard Chartered. However, New Residential Investment is 1.44 times less risky than Standard Chartered. It trades about 0.46 of its potential returns per unit of risk. Standard Chartered PLC is currently generating about 0.23 per unit of risk. If you would invest 1,043 in New Residential Investment on September 3, 2024 and sell it today you would earn a total of 87.00 from holding New Residential Investment or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. Standard Chartered PLC
Performance |
| Timeline |
| New Residential Inve |
| Standard Chartered PLC |
New Residential and Standard Chartered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Standard Chartered
The main advantage of trading using opposite New Residential and Standard Chartered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Standard Chartered 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 Standard Chartered will offset losses from the drop in Standard Chartered's long position.| New Residential vs. CleanTech Lithium plc | New Residential vs. Pfeiffer Vacuum Technology | New Residential vs. Futura Medical | New Residential vs. Spotify Technology SA |
| Standard Chartered vs. SupplyMe Capital PLC | Standard Chartered vs. 88 Energy | Standard Chartered vs. Vodafone Group PLC | Standard Chartered vs. Vodafone Group PLC |
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 CEOs Directory module to screen CEOs from public companies around the world.
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