Correlation Between New Residential and CI GAMES
Can any of the company-specific risk be diversified away by investing in both New Residential and CI GAMES 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 CI GAMES 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 CI GAMES SA, you can compare the effects of market volatilities on New Residential and CI GAMES 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 CI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and CI GAMES.
Diversification Opportunities for New Residential and CI GAMES
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and CI7 is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and CI GAMES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI GAMES SA 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 CI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI GAMES SA has no effect on the direction of New Residential i.e., New Residential and CI GAMES go up and down completely randomly.
Pair Corralation between New Residential and CI GAMES
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.37 times more return on investment than CI GAMES. However, New Residential Investment is 2.73 times less risky than CI GAMES. It trades about 0.22 of its potential returns per unit of risk. CI GAMES SA is currently generating about 0.06 per unit of risk. If you would invest 1,083 in New Residential Investment on November 27, 2024 and sell it today you would earn a total of 53.00 from holding New Residential Investment or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. CI GAMES SA
Performance |
| Timeline |
| New Residential Inve |
| CI GAMES SA |
New Residential and CI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and CI GAMES
The main advantage of trading using opposite New Residential and CI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, CI GAMES 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 CI GAMES will offset losses from the drop in CI GAMES's long position.| New Residential vs. Gruppo Mutuionline SpA | New Residential vs. China Foods Limited | New Residential vs. High Liner Foods | New Residential vs. CanSino Biologics |
| CI GAMES vs. Nintendo Co | CI GAMES vs. Nintendo Co | CI GAMES vs. Sea Limited | CI GAMES vs. Electronic Arts |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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