Correlation Between MEITUAN UNSPADR/2B and New Residential
Can any of the company-specific risk be diversified away by investing in both MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEITUAN UNSPADR2B and New Residential Investment, you can compare the effects of market volatilities on MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR/2B with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITUAN UNSPADR/2B and New Residential.
Diversification Opportunities for MEITUAN UNSPADR/2B and New Residential
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MEITUAN and New is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding MEITUAN UNSPADR2B 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 MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR2B 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 MEITUAN UNSPADR/2B i.e., MEITUAN UNSPADR/2B and New Residential go up and down completely randomly.
Pair Corralation between MEITUAN UNSPADR/2B and New Residential
Assuming the 90 days trading horizon MEITUAN UNSPADR/2B is expected to generate 1.54 times less return on investment than New Residential. In addition to that, MEITUAN UNSPADR/2B is 2.86 times more volatile than New Residential Investment. It trades about 0.02 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.07 per unit of volatility. If you would invest 680.00 in New Residential Investment on August 28, 2024 and sell it today you would earn a total of 372.00 from holding New Residential Investment or generate 54.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEITUAN UNSPADR2B vs. New Residential Investment
Performance |
| Timeline |
| MEITUAN UNSPADR/2B |
| New Residential Inve |
MEITUAN UNSPADR/2B and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITUAN UNSPADR/2B and New Residential
The main advantage of trading using opposite MEITUAN UNSPADR/2B and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITUAN UNSPADR/2B 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.| MEITUAN UNSPADR/2B vs. Amazon Inc | MEITUAN UNSPADR/2B vs. Amazon Inc | MEITUAN UNSPADR/2B vs. Alibaba Group Holdings |
| New Residential vs. Richardson Electronics | New Residential vs. ITALIAN WINE BRANDS | New Residential vs. Goodyear Tire Rubber | New Residential vs. Vulcan Materials |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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