Correlation Between Necessity Retail and New York
Can any of the company-specific risk be diversified away by investing in both Necessity Retail and New York 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 Necessity Retail and New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Necessity Retail REIT and New York Mortgage, you can compare the effects of market volatilities on Necessity Retail and New York 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 Necessity Retail with a short position of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Necessity Retail and New York.
Diversification Opportunities for Necessity Retail and New York
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Necessity and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Necessity Retail REIT and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage and Necessity Retail 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 Necessity Retail REIT are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Necessity Retail i.e., Necessity Retail and New York go up and down completely randomly.
Pair Corralation between Necessity Retail and New York
Assuming the 90 days horizon Necessity Retail is expected to generate 1.14 times less return on investment than New York. In addition to that, Necessity Retail is 1.37 times more volatile than New York Mortgage. It trades about 0.05 of its total potential returns per unit of risk. New York Mortgage is currently generating about 0.08 per unit of volatility. If you would invest 1,683 in New York Mortgage on September 3, 2024 and sell it today you would earn a total of 831.00 from holding New York Mortgage or generate 49.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 30.71% |
| Values | Daily Returns |
Necessity Retail REIT vs. New York Mortgage
Performance |
| Timeline |
| Necessity Retail REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| New York Mortgage |
Necessity Retail and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Necessity Retail and New York
The main advantage of trading using opposite Necessity Retail and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Necessity Retail position performs unexpectedly, New York 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 York will offset losses from the drop in New York's long position.| Necessity Retail vs. RLJ Lodging Trust | Necessity Retail vs. PennyMac Mortgage Investment | Necessity Retail vs. Invesco Mortgage Capital | Necessity Retail vs. New York Mortgage |
| New York vs. New York Mortgage | New York vs. AGNC Investment Corp | New York vs. Chimera Investment | New York vs. AGNC Investment Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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