Correlation Between KEBNI AB and New Residential
Can any of the company-specific risk be diversified away by investing in both KEBNI AB 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 KEBNI AB and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEBNI AB SERB and New Residential Investment, you can compare the effects of market volatilities on KEBNI AB 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 KEBNI AB with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEBNI AB and New Residential.
Diversification Opportunities for KEBNI AB and New Residential
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between KEBNI and New is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding KEBNI AB SERB 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 KEBNI AB 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 KEBNI AB SERB 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 KEBNI AB i.e., KEBNI AB and New Residential go up and down completely randomly.
Pair Corralation between KEBNI AB and New Residential
Assuming the 90 days horizon KEBNI AB SERB is expected to under-perform the New Residential. In addition to that, KEBNI AB is 3.19 times more volatile than New Residential Investment. It trades about -0.09 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.06 per unit of volatility. If you would invest 982.00 in New Residential Investment on September 3, 2024 and sell it today you would earn a total of 76.00 from holding New Residential Investment or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEBNI AB SERB vs. New Residential Investment
Performance |
| Timeline |
| KEBNI AB SERB |
| New Residential Inve |
KEBNI AB and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEBNI AB and New Residential
The main advantage of trading using opposite KEBNI AB and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEBNI AB 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.| KEBNI AB vs. Cisco Systems | KEBNI AB vs. Cisco Systems | KEBNI AB vs. Motorola Solutions | KEBNI AB vs. Nokia |
| New Residential vs. Richardson Electronics | New Residential vs. Clean Energy Fuels | New Residential vs. Renesas Electronics | New Residential vs. METHODE ELECTRONICS |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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