Correlation Between Newretail and Softstar Entertainment
Can any of the company-specific risk be diversified away by investing in both Newretail and Softstar Entertainment 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 Newretail and Softstar Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newretail Co and Softstar Entertainment, you can compare the effects of market volatilities on Newretail and Softstar Entertainment 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 Newretail with a short position of Softstar Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newretail and Softstar Entertainment.
Diversification Opportunities for Newretail and Softstar Entertainment
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newretail and Softstar is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Newretail Co and Softstar Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Softstar Entertainment and Newretail 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 Newretail Co are associated (or correlated) with Softstar Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Softstar Entertainment has no effect on the direction of Newretail i.e., Newretail and Softstar Entertainment go up and down completely randomly.
Pair Corralation between Newretail and Softstar Entertainment
Assuming the 90 days trading horizon Newretail Co is expected to generate 2.41 times more return on investment than Softstar Entertainment. However, Newretail is 2.41 times more volatile than Softstar Entertainment. It trades about 0.05 of its potential returns per unit of risk. Softstar Entertainment is currently generating about -0.01 per unit of risk. If you would invest 1,730 in Newretail Co on October 16, 2024 and sell it today you would earn a total of 890.00 from holding Newretail Co or generate 51.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newretail Co vs. Softstar Entertainment
Performance |
| Timeline |
| Newretail |
| Softstar Entertainment |
Newretail and Softstar Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newretail and Softstar Entertainment
The main advantage of trading using opposite Newretail and Softstar Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newretail position performs unexpectedly, Softstar Entertainment 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 Softstar Entertainment will offset losses from the drop in Softstar Entertainment's long position.| Newretail vs. Strong H Machinery | Newretail vs. Kindom Construction Corp | Newretail vs. Microelectronics Technology | Newretail vs. Advanced Wireless Semiconductor |
| Softstar Entertainment vs. Chinese Gamer International | Softstar Entertainment vs. AVer Information | Softstar Entertainment vs. Newretail Co | Softstar Entertainment vs. International Games System |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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