Correlation Between New Concept and Howard Hughes
Can any of the company-specific risk be diversified away by investing in both New Concept and Howard Hughes 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 New Concept and Howard Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Concept Energy and Howard Hughes, you can compare the effects of market volatilities on New Concept and Howard Hughes 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 New Concept with a short position of Howard Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Concept and Howard Hughes.
Diversification Opportunities for New Concept and Howard Hughes
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Howard is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding New Concept Energy and Howard Hughes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howard Hughes and New Concept 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 New Concept Energy are associated (or correlated) with Howard Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howard Hughes has no effect on the direction of New Concept i.e., New Concept and Howard Hughes go up and down completely randomly.
Pair Corralation between New Concept and Howard Hughes
Considering the 90-day investment horizon New Concept Energy is expected to generate 2.32 times more return on investment than Howard Hughes. However, New Concept is 2.32 times more volatile than Howard Hughes. It trades about 0.02 of its potential returns per unit of risk. Howard Hughes is currently generating about 0.03 per unit of risk. If you would invest 112.00 in New Concept Energy on August 30, 2024 and sell it today you would earn a total of 7.00 from holding New Concept Energy or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Concept Energy vs. Howard Hughes
Performance |
| Timeline |
| New Concept Energy |
| Howard Hughes |
New Concept and Howard Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Concept and Howard Hughes
The main advantage of trading using opposite New Concept and Howard Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Concept position performs unexpectedly, Howard Hughes 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 Howard Hughes will offset losses from the drop in Howard Hughes' long position.| New Concept vs. Marcus Millichap | New Concept vs. Frp Holdings Ord | New Concept vs. Maui Land Pineapple | New Concept vs. Hysan Development Co |
| Howard Hughes vs. St Joe Company | Howard Hughes vs. Stratus Properties | Howard Hughes vs. Comstock Holding Companies | Howard Hughes vs. Distoken Acquisition |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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