Correlation Between New Residential and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both New Residential and HYDROFARM HLD 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 HYDROFARM HLD 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 HYDROFARM HLD GRP, you can compare the effects of market volatilities on New Residential and HYDROFARM HLD 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 HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and HYDROFARM HLD.
Diversification Opportunities for New Residential and HYDROFARM HLD
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and HYDROFARM is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP 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 HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of New Residential i.e., New Residential and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between New Residential and HYDROFARM HLD
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.21 times more return on investment than HYDROFARM HLD. However, New Residential Investment is 4.71 times less risky than HYDROFARM HLD. It trades about 0.17 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about -0.1 per unit of risk. If you would invest 1,038 in New Residential Investment on October 17, 2024 and sell it today you would earn a total of 43.00 from holding New Residential Investment or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| New Residential Inve |
| HYDROFARM HLD GRP |
New Residential and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and HYDROFARM HLD
The main advantage of trading using opposite New Residential and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| New Residential vs. Ryohin Keikaku Co | New Residential vs. Deutsche Telekom AG | New Residential vs. BE Semiconductor Industries | New Residential vs. CRAWFORD A NV |
| HYDROFARM HLD vs. EAT WELL INVESTMENT | HYDROFARM HLD vs. CDL INVESTMENT | HYDROFARM HLD vs. New Residential Investment | HYDROFARM HLD vs. CVW CLEANTECH INC |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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