Correlation Between New Generation and Interups
Can any of the company-specific risk be diversified away by investing in both New Generation and Interups 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 Generation and Interups into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Generation Consumer and Interups, you can compare the effects of market volatilities on New Generation and Interups 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 Generation with a short position of Interups. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Generation and Interups.
Diversification Opportunities for New Generation and Interups
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and Interups is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Generation Consumer and Interups in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interups and New Generation 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 Generation Consumer are associated (or correlated) with Interups. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interups has no effect on the direction of New Generation i.e., New Generation and Interups go up and down completely randomly.
Pair Corralation between New Generation and Interups
Given the investment horizon of 90 days New Generation Consumer is expected to generate 2.31 times more return on investment than Interups. However, New Generation is 2.31 times more volatile than Interups. It trades about 0.03 of its potential returns per unit of risk. Interups is currently generating about 0.01 per unit of risk. If you would invest 0.45 in New Generation Consumer on September 3, 2024 and sell it today you would lose (0.39) from holding New Generation Consumer or give up 86.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Generation Consumer vs. Interups
Performance |
| Timeline |
| New Generation Consumer |
| Interups |
New Generation and Interups Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Generation and Interups
The main advantage of trading using opposite New Generation and Interups positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Generation position performs unexpectedly, Interups 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 Interups will offset losses from the drop in Interups' long position.| New Generation vs. Xtra Energy Corp | New Generation vs. Arsenal Digital Holdings | New Generation vs. UHF Logistics Group | New Generation vs. XCana Petroleum |
| Interups vs. Manaris Corp | Interups vs. Green Planet Bio | Interups vs. Continental Beverage Brands | Interups vs. Opus Magnum Ameris |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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