Correlation Between New Residential and ZhongAn Online
Can any of the company-specific risk be diversified away by investing in both New Residential and ZhongAn Online 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 ZhongAn Online 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 ZhongAn Online P, you can compare the effects of market volatilities on New Residential and ZhongAn Online 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 ZhongAn Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and ZhongAn Online.
Diversification Opportunities for New Residential and ZhongAn Online
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and ZhongAn is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and ZhongAn Online P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZhongAn Online P 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 ZhongAn Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZhongAn Online P has no effect on the direction of New Residential i.e., New Residential and ZhongAn Online go up and down completely randomly.
Pair Corralation between New Residential and ZhongAn Online
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.62 times more return on investment than ZhongAn Online. However, New Residential Investment is 1.62 times less risky than ZhongAn Online. It trades about 0.24 of its potential returns per unit of risk. ZhongAn Online P is currently generating about -0.04 per unit of risk. If you would invest 1,021 in New Residential Investment on October 30, 2024 and sell it today you would earn a total of 62.00 from holding New Residential Investment or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. ZhongAn Online P
Performance |
| Timeline |
| New Residential Inve |
| ZhongAn Online P |
New Residential and ZhongAn Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and ZhongAn Online
The main advantage of trading using opposite New Residential and ZhongAn Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, ZhongAn Online 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 ZhongAn Online will offset losses from the drop in ZhongAn Online's long position.| New Residential vs. Sunny Optical Technology | New Residential vs. SEKISUI CHEMICAL | New Residential vs. TIANDE CHEMICAL | New Residential vs. Casio Computer CoLtd |
| ZhongAn Online vs. Quaker Chemical | ZhongAn Online vs. SINGAPORE AIRLINES | ZhongAn Online vs. X FAB Silicon Foundries | ZhongAn Online vs. Siamgas And Petrochemicals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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