Correlation Between New Economy and New Economy
Can any of the company-specific risk be diversified away by investing in both New Economy 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 New Economy and New Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Economy Fund and New Economy Fund, you can compare the effects of market volatilities on New Economy 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 New Economy with a short position of New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Economy and New Economy.
Diversification Opportunities for New Economy and New Economy
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between New and New is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding New Economy Fund 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 New Economy 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 Economy Fund 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 New Economy i.e., New Economy and New Economy go up and down completely randomly.
Pair Corralation between New Economy and New Economy
Assuming the 90 days horizon New Economy Fund is expected to generate 1.0 times more return on investment than New Economy. However, New Economy is 1.0 times more volatile than New Economy Fund. It trades about 0.1 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.09 per unit of risk. If you would invest 4,359 in New Economy Fund on August 27, 2024 and sell it today you would earn a total of 2,254 from holding New Economy Fund or generate 51.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Economy Fund vs. New Economy Fund
Performance |
| Timeline |
| New Economy Fund |
| New Economy Fund |
New Economy and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Economy and New Economy
The main advantage of trading using opposite New Economy and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Economy 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.| New Economy vs. Calvert High Yield | New Economy vs. T Rowe Price | New Economy vs. Pace High Yield | New Economy vs. Ab Global Risk |
| New Economy vs. New Perspective Fund | New Economy vs. Growth Fund Of | New Economy vs. New World Fund | New Economy vs. American Funds Fundamental |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |