Correlation Between Pender Real and New Economy
Can any of the company-specific risk be diversified away by investing in both Pender Real and New Economy 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 Pender Real and New Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pender Real Estate and New Economy Fund, you can compare the effects of market volatilities on Pender Real and New Economy 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 Pender Real with a short position of New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pender Real and New Economy.
Diversification Opportunities for Pender Real and New Economy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pender and New is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund and Pender Real 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 Pender Real Estate are associated (or correlated) with New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Pender Real i.e., Pender Real and New Economy go up and down completely randomly.
Pair Corralation between Pender Real and New Economy
Assuming the 90 days horizon Pender Real is expected to generate 2.8 times less return on investment than New Economy. But when comparing it to its historical volatility, Pender Real Estate is 15.22 times less risky than New Economy. It trades about 0.52 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,223 in New Economy Fund on August 31, 2024 and sell it today you would earn a total of 1,644 from holding New Economy Fund or generate 38.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.75% |
| Values | Daily Returns |
Pender Real Estate vs. New Economy Fund
Performance |
| Timeline |
| Pender Real Estate |
| New Economy Fund |
Pender Real and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pender Real and New Economy
The main advantage of trading using opposite Pender Real and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pender Real position performs unexpectedly, New Economy 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 Economy will offset losses from the drop in New Economy's long position.| Pender Real vs. Volumetric Fund Volumetric | Pender Real vs. Semiconductor Ultrasector Profund | Pender Real vs. Artisan Thematic Fund | Pender Real vs. Ab Value Fund |
| New Economy vs. Us Real Estate | New Economy vs. Deutsche Real Estate | New Economy vs. Pender Real Estate | New Economy vs. Prudential Real Estate |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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