Correlation Between New Residential and Chuangs China
Can any of the company-specific risk be diversified away by investing in both New Residential and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on New Residential and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Chuangs China.
Diversification Opportunities for New Residential and Chuangs China
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Chuangs is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of New Residential i.e., New Residential and Chuangs China go up and down completely randomly.
Pair Corralation between New Residential and Chuangs China
If you would invest 965.00 in New Residential Investment on August 29, 2024 and sell it today you would earn a total of 87.00 from holding New Residential Investment or generate 9.02% 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. Chuangs China Investments
Performance |
| Timeline |
| New Residential Inve |
| Chuangs China Investments |
New Residential and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Chuangs China
The main advantage of trading using opposite New Residential and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| New Residential vs. Xtrackers ShortDAX | New Residential vs. Xtrackers LevDAX | New Residential vs. Lyxor 1 |
| Chuangs China vs. Superior Plus Corp | Chuangs China vs. NMI Holdings | Chuangs China vs. Origin Agritech | Chuangs China vs. SIVERS SEMICONDUCTORS AB |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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