Correlation Between OPERA SOFTWARE and New Residential
Can any of the company-specific risk be diversified away by investing in both OPERA SOFTWARE and New Residential 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 OPERA SOFTWARE and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPERA SOFTWARE and New Residential Investment, you can compare the effects of market volatilities on OPERA SOFTWARE and New Residential 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 OPERA SOFTWARE with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPERA SOFTWARE and New Residential.
Diversification Opportunities for OPERA SOFTWARE and New Residential
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OPERA and New is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and New Residential Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Residential Inve and OPERA SOFTWARE 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 OPERA SOFTWARE are associated (or correlated) with New Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Residential Inve has no effect on the direction of OPERA SOFTWARE i.e., OPERA SOFTWARE and New Residential go up and down completely randomly.
Pair Corralation between OPERA SOFTWARE and New Residential
Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 32.6 times less return on investment than New Residential. In addition to that, OPERA SOFTWARE is 1.47 times more volatile than New Residential Investment. It trades about 0.0 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.06 per unit of volatility. If you would invest 1,001 in New Residential Investment on October 26, 2024 and sell it today you would earn a total of 75.00 from holding New Residential Investment or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPERA SOFTWARE vs. New Residential Investment
Performance |
| Timeline |
| OPERA SOFTWARE |
| New Residential Inve |
OPERA SOFTWARE and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPERA SOFTWARE and New Residential
The main advantage of trading using opposite OPERA SOFTWARE and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPERA SOFTWARE position performs unexpectedly, New Residential 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 New Residential will offset losses from the drop in New Residential's long position.| OPERA SOFTWARE vs. MHP Hotel AG | OPERA SOFTWARE vs. DALATA HOTEL | OPERA SOFTWARE vs. Perseus Mining Limited | OPERA SOFTWARE vs. ADRIATIC METALS LS 013355 |
| New Residential vs. Cleanaway Waste Management | New Residential vs. OPERA SOFTWARE | New Residential vs. Beta Systems Software | New Residential vs. Axway Software SA |
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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