Correlation Between Amedeo Air and New Residential
Can any of the company-specific risk be diversified away by investing in both Amedeo Air 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 Amedeo Air and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and New Residential Investment, you can compare the effects of market volatilities on Amedeo Air 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 Amedeo Air with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and New Residential.
Diversification Opportunities for Amedeo Air and New Residential
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amedeo and New is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four 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 Amedeo Air 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 Amedeo Air Four 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 Amedeo Air i.e., Amedeo Air and New Residential go up and down completely randomly.
Pair Corralation between Amedeo Air and New Residential
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 0.56 times more return on investment than New Residential. However, Amedeo Air Four is 1.8 times less risky than New Residential. It trades about 0.09 of its potential returns per unit of risk. New Residential Investment is currently generating about 0.04 per unit of risk. If you would invest 3,396 in Amedeo Air Four on October 11, 2024 and sell it today you would earn a total of 2,454 from holding Amedeo Air Four or generate 72.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Amedeo Air Four vs. New Residential Investment
Performance |
| Timeline |
| Amedeo Air Four |
| New Residential Inve |
Amedeo Air and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and New Residential
The main advantage of trading using opposite Amedeo Air and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air 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.| Amedeo Air vs. Eneraqua Technologies PLC | Amedeo Air vs. Power Metal Resources | Amedeo Air vs. SMA Solar Technology | Amedeo Air vs. Micron Technology |
| New Residential vs. Walmart | New Residential vs. BYD Co | New Residential vs. Volkswagen AG | New Residential vs. Volkswagen AG Non Vtg |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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