Correlation Between New Residential and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both New Residential and AOI Electronics 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 AOI Electronics 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 AOI Electronics Co, you can compare the effects of market volatilities on New Residential and AOI Electronics 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 AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and AOI Electronics.
Diversification Opportunities for New Residential and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of New Residential i.e., New Residential and AOI Electronics go up and down completely randomly.
Pair Corralation between New Residential and AOI Electronics
If you would invest 599.00 in New Residential Investment on December 1, 2024 and sell it today you would earn a total of 559.00 from holding New Residential Investment or generate 93.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. AOI Electronics Co
Performance |
| Timeline |
| New Residential Inve |
| AOI Electronics |
New Residential and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and AOI Electronics
The main advantage of trading using opposite New Residential and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' long position.| New Residential vs. Tsingtao Brewery | New Residential vs. United Breweries Co | New Residential vs. Harmony Gold Mining | New Residential vs. MCEWEN MINING INC |
| AOI Electronics vs. Medical Properties Trust | AOI Electronics vs. Carsales | AOI Electronics vs. Japan Medical Dynamic | AOI Electronics vs. Gruppo Mutuionline SpA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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