Correlation Between New Residential and Industrias Penoles
Can any of the company-specific risk be diversified away by investing in both New Residential and Industrias Penoles 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 Industrias Penoles 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 Industrias Penoles Sab, you can compare the effects of market volatilities on New Residential and Industrias Penoles 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 Industrias Penoles. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Industrias Penoles.
Diversification Opportunities for New Residential and Industrias Penoles
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Industrias is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Industrias Penoles Sab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias Penoles Sab 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 Industrias Penoles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias Penoles Sab has no effect on the direction of New Residential i.e., New Residential and Industrias Penoles go up and down completely randomly.
Pair Corralation between New Residential and Industrias Penoles
Assuming the 90 days trading horizon New Residential is expected to generate 2.43 times less return on investment than Industrias Penoles. But when comparing it to its historical volatility, New Residential Investment is 2.36 times less risky than Industrias Penoles. It trades about 0.2 of its potential returns per unit of risk. Industrias Penoles Sab is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,210 in Industrias Penoles Sab on November 3, 2024 and sell it today you would earn a total of 150.00 from holding Industrias Penoles Sab or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. Industrias Penoles Sab
Performance |
| Timeline |
| New Residential Inve |
| Industrias Penoles Sab |
New Residential and Industrias Penoles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Industrias Penoles
The main advantage of trading using opposite New Residential and Industrias Penoles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Industrias Penoles 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 Industrias Penoles will offset losses from the drop in Industrias Penoles' long position.| New Residential vs. Zijin Mining Group | New Residential vs. Harmony Gold Mining | New Residential vs. Tradegate AG Wertpapierhandelsbank | New Residential vs. Perseus Mining Limited |
| Industrias Penoles vs. GWILLI FOOD | Industrias Penoles vs. Altair Engineering | Industrias Penoles vs. SOGECLAIR SA INH | Industrias Penoles vs. CN MODERN DAIRY |
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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