Correlation Between New Residential and CH Robinson
Can any of the company-specific risk be diversified away by investing in both New Residential and CH Robinson 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 CH Robinson 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 CH Robinson Worldwide, you can compare the effects of market volatilities on New Residential and CH Robinson 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 CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and CH Robinson.
Diversification Opportunities for New Residential and CH Robinson
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between New and CH1A is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide 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 CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of New Residential i.e., New Residential and CH Robinson go up and down completely randomly.
Pair Corralation between New Residential and CH Robinson
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.63 times more return on investment than CH Robinson. However, New Residential Investment is 1.6 times less risky than CH Robinson. It trades about 0.23 of its potential returns per unit of risk. CH Robinson Worldwide is currently generating about 0.03 per unit of risk. If you would invest 1,006 in New Residential Investment on September 13, 2024 and sell it today you would earn a total of 47.00 from holding New Residential Investment or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. CH Robinson Worldwide
Performance |
| Timeline |
| New Residential Inve |
| CH Robinson Worldwide |
New Residential and CH Robinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and CH Robinson
The main advantage of trading using opposite New Residential and CH Robinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, CH Robinson 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 CH Robinson will offset losses from the drop in CH Robinson's long position.| New Residential vs. PLAYTIKA HOLDING DL 01 | New Residential vs. Nine Dragons Paper | New Residential vs. Sunstone Hotel Investors | New Residential vs. Onxeo SA |
| CH Robinson vs. CDL INVESTMENT | CH Robinson vs. Virtus Investment Partners | CH Robinson vs. PennyMac Mortgage Investment | CH Robinson vs. New Residential Investment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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