Correlation Between New Residential and ARROW ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both New Residential and ARROW ELECTRONICS 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 ARROW ELECTRONICS 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 ARROW ELECTRONICS, you can compare the effects of market volatilities on New Residential and ARROW ELECTRONICS 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 ARROW ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and ARROW ELECTRONICS.
Diversification Opportunities for New Residential and ARROW ELECTRONICS
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and ARROW is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and ARROW ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARROW ELECTRONICS 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 ARROW ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARROW ELECTRONICS has no effect on the direction of New Residential i.e., New Residential and ARROW ELECTRONICS go up and down completely randomly.
Pair Corralation between New Residential and ARROW ELECTRONICS
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.63 times more return on investment than ARROW ELECTRONICS. However, New Residential Investment is 1.58 times less risky than ARROW ELECTRONICS. It trades about 0.26 of its potential returns per unit of risk. ARROW ELECTRONICS is currently generating about -0.28 per unit of risk. If you would invest 1,102 in New Residential Investment on December 4, 2024 and sell it today you would earn a total of 62.00 from holding New Residential Investment or generate 5.63% 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. ARROW ELECTRONICS
Performance |
| Timeline |
| New Residential Inve |
| ARROW ELECTRONICS |
New Residential and ARROW ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and ARROW ELECTRONICS
The main advantage of trading using opposite New Residential and ARROW ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, ARROW ELECTRONICS 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 ARROW ELECTRONICS will offset losses from the drop in ARROW ELECTRONICS's long position.| New Residential vs. Cofinimmo SA | New Residential vs. Compagnie de Saint Gobain | New Residential vs. OMV Aktiengesellschaft | New Residential vs. QUICKSTEP HLDGS |
| ARROW ELECTRONICS vs. Verizon Communications | ARROW ELECTRONICS vs. INTERSHOP Communications Aktiengesellschaft | ARROW ELECTRONICS vs. T MOBILE US | ARROW ELECTRONICS vs. FIH MOBILE |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |