Correlation Between New America and Suntex Enterprises
Can any of the company-specific risk be diversified away by investing in both New America and Suntex Enterprises 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 Suntex Enterprises 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 Suntex Enterprises, you can compare the effects of market volatilities on New America and Suntex Enterprises 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 Suntex Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of New America and Suntex Enterprises.
Diversification Opportunities for New America and Suntex Enterprises
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Suntex is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding New America High and Suntex Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntex Enterprises 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 Suntex Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntex Enterprises has no effect on the direction of New America i.e., New America and Suntex Enterprises go up and down completely randomly.
Pair Corralation between New America and Suntex Enterprises
Considering the 90-day investment horizon New America is expected to generate 24.68 times less return on investment than Suntex Enterprises. But when comparing it to its historical volatility, New America High is 29.37 times less risky than Suntex Enterprises. It trades about 0.09 of its potential returns per unit of risk. Suntex Enterprises is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.65 in Suntex Enterprises on September 25, 2024 and sell it today you would lose (0.47) from holding Suntex Enterprises or give up 72.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New America High vs. Suntex Enterprises
Performance |
| Timeline |
| New America High |
| Suntex Enterprises |
New America and Suntex Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New America and Suntex Enterprises
The main advantage of trading using opposite New America and Suntex Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New America position performs unexpectedly, Suntex Enterprises 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 Suntex Enterprises will offset losses from the drop in Suntex Enterprises' long position.| New America vs. BNY Mellon High | New America vs. Mfs Intermediate High | New America vs. Eaton Vance Risk | New America vs. Nuveen Floating Rate |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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