Correlation Between New Residential and SCHALTBAU HOLDING
Can any of the company-specific risk be diversified away by investing in both New Residential and SCHALTBAU HOLDING 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 SCHALTBAU HOLDING 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 SCHALTBAU HOLDING, you can compare the effects of market volatilities on New Residential and SCHALTBAU HOLDING 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 SCHALTBAU HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and SCHALTBAU HOLDING.
Diversification Opportunities for New Residential and SCHALTBAU HOLDING
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and SCHALTBAU is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and SCHALTBAU HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHALTBAU HOLDING 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 SCHALTBAU HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHALTBAU HOLDING has no effect on the direction of New Residential i.e., New Residential and SCHALTBAU HOLDING go up and down completely randomly.
Pair Corralation between New Residential and SCHALTBAU HOLDING
Assuming the 90 days trading horizon New Residential Investment is expected to generate 1.15 times more return on investment than SCHALTBAU HOLDING. However, New Residential is 1.15 times more volatile than SCHALTBAU HOLDING. It trades about 0.09 of its potential returns per unit of risk. SCHALTBAU HOLDING is currently generating about -0.01 per unit of risk. If you would invest 773.00 in New Residential Investment on September 12, 2024 and sell it today you would earn a total of 282.00 from holding New Residential Investment or generate 36.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Residential Investment vs. SCHALTBAU HOLDING
Performance |
| Timeline |
| New Residential Inve |
| SCHALTBAU HOLDING |
New Residential and SCHALTBAU HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and SCHALTBAU HOLDING
The main advantage of trading using opposite New Residential and SCHALTBAU HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential position performs unexpectedly, SCHALTBAU HOLDING 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 SCHALTBAU HOLDING will offset losses from the drop in SCHALTBAU HOLDING's long position.| New Residential vs. PKSHA TECHNOLOGY INC | New Residential vs. FARO Technologies | New Residential vs. CI GAMES SA | New Residential vs. EAST SIDE GAMES |
| SCHALTBAU HOLDING vs. AOYAMA TRADING | SCHALTBAU HOLDING vs. SLR Investment Corp | SCHALTBAU HOLDING vs. New Residential Investment | SCHALTBAU HOLDING vs. DIVERSIFIED ROYALTY |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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