Correlation Between New Residential and Blue Sky
Can any of the company-specific risk be diversified away by investing in both New Residential and Blue Sky 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 Blue Sky 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 Blue Sky Uranium, you can compare the effects of market volatilities on New Residential and Blue Sky 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 Blue Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Blue Sky.
Diversification Opportunities for New Residential and Blue Sky
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Blue is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Blue Sky Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sky Uranium 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 Blue Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sky Uranium has no effect on the direction of New Residential i.e., New Residential and Blue Sky go up and down completely randomly.
Pair Corralation between New Residential and Blue Sky
Assuming the 90 days trading horizon New Residential is expected to generate 27.84 times less return on investment than Blue Sky. But when comparing it to its historical volatility, New Residential Investment is 17.31 times less risky than Blue Sky. It trades about 0.06 of its potential returns per unit of risk. Blue Sky Uranium is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.66 in Blue Sky Uranium on September 12, 2024 and sell it today you would earn a total of 0.34 from holding Blue Sky Uranium or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
New Residential Investment vs. Blue Sky Uranium
Performance |
| Timeline |
| New Residential Inve |
| Blue Sky Uranium |
New Residential and Blue Sky Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Blue Sky
The main advantage of trading using opposite New Residential and Blue Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Blue Sky 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 Blue Sky will offset losses from the drop in Blue Sky'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 |
| Blue Sky vs. Benchmark Electronics | Blue Sky vs. AOI Electronics Co | Blue Sky vs. Coeur Mining | Blue Sky vs. Evolution Mining Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |