Correlation Between New Residential and Vicinity Centres
Can any of the company-specific risk be diversified away by investing in both New Residential and Vicinity Centres 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 Vicinity Centres 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 Vicinity Centres, you can compare the effects of market volatilities on New Residential and Vicinity Centres 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 Vicinity Centres. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Vicinity Centres.
Diversification Opportunities for New Residential and Vicinity Centres
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Vicinity is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Vicinity Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres 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 Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of New Residential i.e., New Residential and Vicinity Centres go up and down completely randomly.
Pair Corralation between New Residential and Vicinity Centres
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.73 times more return on investment than Vicinity Centres. However, New Residential Investment is 1.37 times less risky than Vicinity Centres. It trades about 0.08 of its potential returns per unit of risk. Vicinity Centres is currently generating about 0.04 per unit of risk. If you would invest 768.00 in New Residential Investment on September 12, 2024 and sell it today you would earn a total of 287.00 from holding New Residential Investment or generate 37.37% 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. Vicinity Centres
Performance |
| Timeline |
| New Residential Inve |
| Vicinity Centres |
New Residential and Vicinity Centres Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Vicinity Centres
The main advantage of trading using opposite New Residential and Vicinity Centres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Vicinity Centres 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 Vicinity Centres will offset losses from the drop in Vicinity Centres' long position.| New Residential vs. PKSHA TECHNOLOGY INC | New Residential vs. FARO Technologies | New Residential vs. CI GAMES SA | New Residential vs. EAST SIDE GAMES |
| Vicinity Centres vs. Federal Agricultural Mortgage | Vicinity Centres vs. Tower One Wireless | Vicinity Centres vs. CSSC Offshore Marine | Vicinity Centres vs. Hanison Construction Holdings |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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