Correlation Between Edita Food and New Residential
Can any of the company-specific risk be diversified away by investing in both Edita Food 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 Edita Food and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and New Residential Investment, you can compare the effects of market volatilities on Edita Food 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 Edita Food with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and New Residential.
Diversification Opportunities for Edita Food and New Residential
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edita and New is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries 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 Edita Food 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 Edita Food Industries 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 Edita Food i.e., Edita Food and New Residential go up and down completely randomly.
Pair Corralation between Edita Food and New Residential
Assuming the 90 days trading horizon Edita Food Industries is expected to generate 2.54 times more return on investment than New Residential. However, Edita Food is 2.54 times more volatile than New Residential Investment. It trades about 0.0 of its potential returns per unit of risk. New Residential Investment is currently generating about -0.08 per unit of risk. If you would invest 200.00 in Edita Food Industries on December 11, 2024 and sell it today you would lose (1.00) from holding Edita Food Industries or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Edita Food Industries vs. New Residential Investment
Performance |
| Timeline |
| Edita Food Industries |
| New Residential Inve |
Edita Food and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and New Residential
The main advantage of trading using opposite Edita Food and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food 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.| Edita Food vs. Samsung Electronics Co | Edita Food vs. Samsung Electronics Co | Edita Food vs. Samsung Electronics Co | Edita Food vs. Toyota Motor Corp |
| New Residential vs. Litigation Capital Management | New Residential vs. Air Products Chemicals | New Residential vs. Gaztransport et Technigaz | New Residential vs. Eastman Chemical Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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