Correlation Between Newlake Capital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Newlake Capital and Dow Jones 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 Newlake Capital and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newlake Capital Partners and Dow Jones Industrial, you can compare the effects of market volatilities on Newlake Capital and Dow Jones 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 Newlake Capital with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newlake Capital and Dow Jones.
Diversification Opportunities for Newlake Capital and Dow Jones
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Newlake and Dow is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Newlake Capital Partners and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Newlake Capital 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 Newlake Capital Partners are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Newlake Capital i.e., Newlake Capital and Dow Jones go up and down completely randomly.
Pair Corralation between Newlake Capital and Dow Jones
Given the investment horizon of 90 days Newlake Capital Partners is expected to generate 2.57 times more return on investment than Dow Jones. However, Newlake Capital is 2.57 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 1,456 in Newlake Capital Partners on August 24, 2024 and sell it today you would earn a total of 434.00 from holding Newlake Capital Partners or generate 29.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newlake Capital Partners vs. Dow Jones Industrial
Performance |
| Timeline |
Newlake Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Newlake Capital Partners
Pair trading matchups for Newlake Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Newlake Capital and Dow Jones
The main advantage of trading using opposite Newlake Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newlake Capital position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Newlake Capital vs. AFC Gamma | Newlake Capital vs. Alpineome Property Trust | Newlake Capital vs. Chicago Atlantic Real | Newlake Capital vs. Power REIT |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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