Correlation Between New Residential and Oriola Oyj
Can any of the company-specific risk be diversified away by investing in both New Residential and Oriola Oyj 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 Oriola Oyj 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 Oriola Oyj, you can compare the effects of market volatilities on New Residential and Oriola Oyj 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 Oriola Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Oriola Oyj.
Diversification Opportunities for New Residential and Oriola Oyj
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Oriola is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Oriola Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriola Oyj 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 Oriola Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriola Oyj has no effect on the direction of New Residential i.e., New Residential and Oriola Oyj go up and down completely randomly.
Pair Corralation between New Residential and Oriola Oyj
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.8 times more return on investment than Oriola Oyj. However, New Residential Investment is 1.25 times less risky than Oriola Oyj. It trades about 0.08 of its potential returns per unit of risk. Oriola Oyj is currently generating about -0.06 per unit of risk. If you would invest 640.00 in New Residential Investment on September 13, 2024 and sell it today you would earn a total of 413.00 from holding New Residential Investment or generate 64.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
New Residential Investment vs. Oriola Oyj
Performance |
| Timeline |
| New Residential Inve |
| Oriola Oyj |
New Residential and Oriola Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Oriola Oyj
The main advantage of trading using opposite New Residential and Oriola Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, Oriola Oyj 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 Oriola Oyj will offset losses from the drop in Oriola Oyj'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 |
| Oriola Oyj vs. Check Point Software | Oriola Oyj vs. ECHO INVESTMENT ZY | Oriola Oyj vs. New Residential Investment | Oriola Oyj vs. SCOTT TECHNOLOGY |
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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