Correlation Between Fulcrum Metals and New Residential
Can any of the company-specific risk be diversified away by investing in both Fulcrum Metals 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 Fulcrum Metals and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulcrum Metals PLC and New Residential Investment, you can compare the effects of market volatilities on Fulcrum Metals 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 Fulcrum Metals with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Metals and New Residential.
Diversification Opportunities for Fulcrum Metals and New Residential
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fulcrum and New is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Metals 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 Fulcrum Metals 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 Fulcrum Metals 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 Fulcrum Metals i.e., Fulcrum Metals and New Residential go up and down completely randomly.
Pair Corralation between Fulcrum Metals and New Residential
Assuming the 90 days trading horizon Fulcrum Metals PLC is expected to generate 1.56 times more return on investment than New Residential. However, Fulcrum Metals is 1.56 times more volatile than New Residential Investment. It trades about 0.32 of its potential returns per unit of risk. New Residential Investment is currently generating about 0.2 per unit of risk. If you would invest 775.00 in Fulcrum Metals PLC on November 4, 2024 and sell it today you would earn a total of 100.00 from holding Fulcrum Metals PLC or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulcrum Metals PLC vs. New Residential Investment
Performance |
| Timeline |
| Fulcrum Metals PLC |
| New Residential Inve |
Fulcrum Metals and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulcrum Metals and New Residential
The main advantage of trading using opposite Fulcrum Metals and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Metals 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.| Fulcrum Metals vs. BlackRock Frontiers Investment | Fulcrum Metals vs. Monks Investment Trust | Fulcrum Metals vs. Fevertree Drinks Plc | Fulcrum Metals vs. Bell Food Group |
| New Residential vs. Bell Food Group | New Residential vs. Trainline Plc | New Residential vs. Molson Coors Beverage | New Residential vs. Hilton Food Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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