Correlation Between Newcity Public and NEP Realty
Can any of the company-specific risk be diversified away by investing in both Newcity Public and NEP Realty 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 Newcity Public and NEP Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcity Public and NEP Realty and, you can compare the effects of market volatilities on Newcity Public and NEP Realty 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 Newcity Public with a short position of NEP Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcity Public and NEP Realty.
Diversification Opportunities for Newcity Public and NEP Realty
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newcity and NEP is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Newcity Public and NEP Realty and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEP Realty and Newcity Public 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 Newcity Public are associated (or correlated) with NEP Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEP Realty has no effect on the direction of Newcity Public i.e., Newcity Public and NEP Realty go up and down completely randomly.
Pair Corralation between Newcity Public and NEP Realty
Assuming the 90 days horizon Newcity Public is expected to generate 1.06 times less return on investment than NEP Realty. In addition to that, Newcity Public is 1.0 times more volatile than NEP Realty and. It trades about 0.08 of its total potential returns per unit of risk. NEP Realty and is currently generating about 0.08 per unit of volatility. If you would invest 20.00 in NEP Realty and on September 3, 2024 and sell it today you would earn a total of 1.00 from holding NEP Realty and or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newcity Public vs. NEP Realty and
Performance |
| Timeline |
| Newcity Public |
| NEP Realty |
Newcity Public and NEP Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcity Public and NEP Realty
The main advantage of trading using opposite Newcity Public and NEP Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcity Public position performs unexpectedly, NEP Realty 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 NEP Realty will offset losses from the drop in NEP Realty's long position.| Newcity Public vs. Central Pattana Public | Newcity Public vs. CP ALL Public | Newcity Public vs. Bangkok Dusit Medical | Newcity Public vs. Airports of Thailand |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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