Correlation Between NEW WORLD and FRASERS PROPERTY
Can any of the company-specific risk be diversified away by investing in both NEW WORLD and FRASERS PROPERTY 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 WORLD and FRASERS PROPERTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW WORLD DEVCO and FRASERS PROPERTY, you can compare the effects of market volatilities on NEW WORLD and FRASERS PROPERTY 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 WORLD with a short position of FRASERS PROPERTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW WORLD and FRASERS PROPERTY.
Diversification Opportunities for NEW WORLD and FRASERS PROPERTY
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NEW and FRASERS is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NEW WORLD DEVCO and FRASERS PROPERTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRASERS PROPERTY and NEW WORLD 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 WORLD DEVCO are associated (or correlated) with FRASERS PROPERTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRASERS PROPERTY has no effect on the direction of NEW WORLD i.e., NEW WORLD and FRASERS PROPERTY go up and down completely randomly.
Pair Corralation between NEW WORLD and FRASERS PROPERTY
Assuming the 90 days trading horizon NEW WORLD DEVCO is expected to under-perform the FRASERS PROPERTY. In addition to that, NEW WORLD is 3.27 times more volatile than FRASERS PROPERTY. It trades about -0.28 of its total potential returns per unit of risk. FRASERS PROPERTY is currently generating about -0.06 per unit of volatility. If you would invest 64.00 in FRASERS PROPERTY on September 24, 2024 and sell it today you would lose (1.00) from holding FRASERS PROPERTY or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW WORLD DEVCO vs. FRASERS PROPERTY
Performance |
| Timeline |
| NEW WORLD DEVCO |
| FRASERS PROPERTY |
NEW WORLD and FRASERS PROPERTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW WORLD and FRASERS PROPERTY
The main advantage of trading using opposite NEW WORLD and FRASERS PROPERTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW WORLD position performs unexpectedly, FRASERS PROPERTY 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 FRASERS PROPERTY will offset losses from the drop in FRASERS PROPERTY's long position.| NEW WORLD vs. OPEN HOUSE GROUP | NEW WORLD vs. AEON MALL LTD | NEW WORLD vs. Hufvudstaden AB | NEW WORLD vs. FRASERS PROPERTY |
| FRASERS PROPERTY vs. NEW WORLD DEVCO | FRASERS PROPERTY vs. OPEN HOUSE GROUP | FRASERS PROPERTY vs. AEON MALL LTD | FRASERS PROPERTY vs. Hufvudstaden AB |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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