Correlation Between New America and Standard Life
Can any of the company-specific risk be diversified away by investing in both New America and Standard Life 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 America and Standard Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New America High and Standard Life Aberdeen, you can compare the effects of market volatilities on New America and Standard Life 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 America with a short position of Standard Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of New America and Standard Life.
Diversification Opportunities for New America and Standard Life
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Standard is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding New America High and Standard Life Aberdeen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Life Aberdeen and New America 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 America High are associated (or correlated) with Standard Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Life Aberdeen has no effect on the direction of New America i.e., New America and Standard Life go up and down completely randomly.
Pair Corralation between New America and Standard Life
Considering the 90-day investment horizon New America High is expected to generate 0.17 times more return on investment than Standard Life. However, New America High is 5.99 times less risky than Standard Life. It trades about 0.1 of its potential returns per unit of risk. Standard Life Aberdeen is currently generating about 0.02 per unit of risk. If you would invest 581.00 in New America High on September 13, 2024 and sell it today you would earn a total of 250.00 from holding New America High or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.14% |
| Values | Daily Returns |
New America High vs. Standard Life Aberdeen
Performance |
| Timeline |
| New America High |
| Standard Life Aberdeen |
New America and Standard Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New America and Standard Life
The main advantage of trading using opposite New America and Standard Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New America position performs unexpectedly, Standard Life 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 Standard Life will offset losses from the drop in Standard Life's long position.| New America vs. Pioneer Municipal High | New America vs. DWS Municipal Income | New America vs. RiverNorth Specialty Finance | New America vs. Putnam Managed Municipal |
| Standard Life vs. Nuveen Global High | Standard Life vs. New America High | Standard Life vs. Brookfield Business Corp | Standard Life vs. Elysee Development Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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