Correlation Between New Residential and FIRST SAVINGS
Can any of the company-specific risk be diversified away by investing in both New Residential and FIRST SAVINGS 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 FIRST SAVINGS 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 FIRST SAVINGS FINL, you can compare the effects of market volatilities on New Residential and FIRST SAVINGS 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 FIRST SAVINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and FIRST SAVINGS.
Diversification Opportunities for New Residential and FIRST SAVINGS
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and FIRST is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and FIRST SAVINGS FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SAVINGS FINL 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 FIRST SAVINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SAVINGS FINL has no effect on the direction of New Residential i.e., New Residential and FIRST SAVINGS go up and down completely randomly.
Pair Corralation between New Residential and FIRST SAVINGS
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.52 times more return on investment than FIRST SAVINGS. However, New Residential Investment is 1.92 times less risky than FIRST SAVINGS. It trades about 0.21 of its potential returns per unit of risk. FIRST SAVINGS FINL is currently generating about -0.17 per unit of risk. If you would invest 1,053 in New Residential Investment on November 3, 2024 and sell it today you would earn a total of 54.00 from holding New Residential Investment or generate 5.13% 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. FIRST SAVINGS FINL
Performance |
| Timeline |
| New Residential Inve |
| FIRST SAVINGS FINL |
New Residential and FIRST SAVINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and FIRST SAVINGS
The main advantage of trading using opposite New Residential and FIRST SAVINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, FIRST SAVINGS 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 FIRST SAVINGS will offset losses from the drop in FIRST SAVINGS's 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 |
| FIRST SAVINGS vs. SIDETRADE EO 1 | FIRST SAVINGS vs. TRADELINK ELECTRON | FIRST SAVINGS vs. Medical Properties Trust | FIRST SAVINGS vs. Inspire Medical Systems |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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