Correlation Between NEW WORLD and OPEN HOUSE
Can any of the company-specific risk be diversified away by investing in both NEW WORLD and OPEN HOUSE 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 OPEN HOUSE 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 OPEN HOUSE GROUP, you can compare the effects of market volatilities on NEW WORLD and OPEN HOUSE 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 OPEN HOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW WORLD and OPEN HOUSE.
Diversification Opportunities for NEW WORLD and OPEN HOUSE
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NEW and OPEN is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding NEW WORLD DEVCO and OPEN HOUSE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN HOUSE GROUP 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 OPEN HOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN HOUSE GROUP has no effect on the direction of NEW WORLD i.e., NEW WORLD and OPEN HOUSE go up and down completely randomly.
Pair Corralation between NEW WORLD and OPEN HOUSE
Assuming the 90 days trading horizon NEW WORLD DEVCO is expected to under-perform the OPEN HOUSE. In addition to that, NEW WORLD is 1.16 times more volatile than OPEN HOUSE GROUP. It trades about -0.04 of its total potential returns per unit of risk. OPEN HOUSE GROUP is currently generating about 0.04 per unit of volatility. If you would invest 2,338 in OPEN HOUSE GROUP on September 24, 2024 and sell it today you would earn a total of 942.00 from holding OPEN HOUSE GROUP or generate 40.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW WORLD DEVCO vs. OPEN HOUSE GROUP
Performance |
| Timeline |
| NEW WORLD DEVCO |
| OPEN HOUSE GROUP |
NEW WORLD and OPEN HOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW WORLD and OPEN HOUSE
The main advantage of trading using opposite NEW WORLD and OPEN HOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW WORLD position performs unexpectedly, OPEN HOUSE 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 OPEN HOUSE will offset losses from the drop in OPEN HOUSE'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 |
| OPEN HOUSE vs. NEW WORLD DEVCO | OPEN HOUSE vs. AEON MALL LTD | OPEN HOUSE vs. Hufvudstaden AB | OPEN HOUSE vs. FRASERS PROPERTY |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |