Correlation Between AstraZeneca PLC and New Residential
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC 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 AstraZeneca PLC and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and New Residential Investment, you can compare the effects of market volatilities on AstraZeneca PLC 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 AstraZeneca PLC with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and New Residential.
Diversification Opportunities for AstraZeneca PLC and New Residential
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between AstraZeneca and New is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC i.e., AstraZeneca PLC and New Residential go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and New Residential
Assuming the 90 days trading horizon AstraZeneca PLC is expected to generate 0.78 times more return on investment than New Residential. However, AstraZeneca PLC is 1.28 times less risky than New Residential. It trades about 0.26 of its potential returns per unit of risk. New Residential Investment is currently generating about 0.16 per unit of risk. If you would invest 1,043,600 in AstraZeneca PLC on October 25, 2024 and sell it today you would earn a total of 60,400 from holding AstraZeneca PLC or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
AstraZeneca PLC vs. New Residential Investment
Performance |
| Timeline |
| AstraZeneca PLC |
| New Residential Inve |
AstraZeneca PLC and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and New Residential
The main advantage of trading using opposite AstraZeneca PLC and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC 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.| AstraZeneca PLC vs. Eastinco Mining Exploration | AstraZeneca PLC vs. Coeur Mining | AstraZeneca PLC vs. iShares Physical Silver | AstraZeneca PLC vs. AfriTin Mining |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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