Correlation Between New England and J W
Can any of the company-specific risk be diversified away by investing in both New England and J W 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 England and J W into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New England Realty and J W Mays, you can compare the effects of market volatilities on New England and J W 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 England with a short position of J W. Check out your portfolio center. Please also check ongoing floating volatility patterns of New England and J W.
Diversification Opportunities for New England and J W
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and MAYS is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding New England Realty and J W Mays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J W Mays and New England 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 England Realty are associated (or correlated) with J W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J W Mays has no effect on the direction of New England i.e., New England and J W go up and down completely randomly.
Pair Corralation between New England and J W
Considering the 90-day investment horizon New England is expected to generate 3.4 times less return on investment than J W. But when comparing it to its historical volatility, New England Realty is 1.86 times less risky than J W. It trades about 0.08 of its potential returns per unit of risk. J W Mays is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,301 in J W Mays on August 26, 2024 and sell it today you would lose (101.00) from holding J W Mays or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.14% |
| Values | Daily Returns |
New England Realty vs. J W Mays
Performance |
| Timeline |
| New England Realty |
| J W Mays |
New England and J W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New England and J W
The main advantage of trading using opposite New England and J W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New England position performs unexpectedly, J W 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 J W will offset losses from the drop in J W's long position.| New England vs. J W Mays | New England vs. The Intergroup | New England vs. Transcontinental Realty Investors | New England vs. American Realty Investors |
| J W vs. New England Realty | J W vs. Marcus Millichap | J W vs. FirstService Corp | J W vs. Maui Land Pineapple |
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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