Correlation Between FIRST SAVINGS and New Residential
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS and New Residential 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 FIRST SAVINGS and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SAVINGS FINL and New Residential Investment, you can compare the effects of market volatilities on FIRST SAVINGS and New Residential 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 FIRST SAVINGS with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and New Residential.
Diversification Opportunities for FIRST SAVINGS and New Residential
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between FIRST and New is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve and FIRST SAVINGS 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 FIRST SAVINGS FINL are associated (or correlated) with New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of FIRST SAVINGS i.e., FIRST SAVINGS and New Residential go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and New Residential
Assuming the 90 days horizon FIRST SAVINGS FINL is expected to generate 1.94 times more return on investment than New Residential. However, FIRST SAVINGS is 1.94 times more volatile than New Residential Investment. It trades about 0.08 of its potential returns per unit of risk. New Residential Investment is currently generating about 0.09 per unit of risk. If you would invest 1,487 in FIRST SAVINGS FINL on November 3, 2024 and sell it today you would earn a total of 653.00 from holding FIRST SAVINGS FINL or generate 43.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SAVINGS FINL vs. New Residential Investment
Performance |
| Timeline |
| FIRST SAVINGS FINL |
| New Residential Inve |
FIRST SAVINGS and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SAVINGS and New Residential
The main advantage of trading using opposite FIRST SAVINGS and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| FIRST SAVINGS vs. SIDETRADE EO 1 | FIRST SAVINGS vs. TRADELINK ELECTRON | FIRST SAVINGS vs. Medical Properties Trust | FIRST SAVINGS vs. Inspire Medical Systems |
| New Residential vs. Zijin Mining Group | New Residential vs. Harmony Gold Mining | New Residential vs. Tradegate AG Wertpapierhandelsbank | New Residential vs. Perseus 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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