Correlation Between Hansa Investment and New Residential
Can any of the company-specific risk be diversified away by investing in both Hansa Investment 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 Hansa Investment and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and New Residential Investment, you can compare the effects of market volatilities on Hansa Investment 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 Hansa Investment with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and New Residential.
Diversification Opportunities for Hansa Investment and New Residential
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansa and New is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment 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 Hansa Investment 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 Hansa Investment 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 Hansa Investment i.e., Hansa Investment and New Residential go up and down completely randomly.
Pair Corralation between Hansa Investment and New Residential
Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.98 times more return on investment than New Residential. However, Hansa Investment is 1.02 times less risky than New Residential. It trades about 0.05 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 20,448 in Hansa Investment on August 27, 2024 and sell it today you would earn a total of 2,152 from holding Hansa Investment or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.95% |
| Values | Daily Returns |
Hansa Investment vs. New Residential Investment
Performance |
| Timeline |
| Hansa Investment |
| New Residential Inve |
Hansa Investment and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and New Residential
The main advantage of trading using opposite Hansa Investment and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment 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.| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. BH Macro Limited | Hansa Investment vs. TMT Investments PLC | Hansa Investment vs. Intermediate Capital Group |
| New Residential vs. Automatic Data Processing | New Residential vs. GreenX Metals | New Residential vs. Deltex Medical Group | New Residential vs. Advanced Medical Solutions |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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