Correlation Between Triad Group and New Residential
Can any of the company-specific risk be diversified away by investing in both Triad Group 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 Triad Group and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and New Residential Investment, you can compare the effects of market volatilities on Triad Group 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 Triad Group with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and New Residential.
Diversification Opportunities for Triad Group and New Residential
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Triad and New is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC 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 Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and New Residential go up and down completely randomly.
Pair Corralation between Triad Group and New Residential
Assuming the 90 days trading horizon Triad Group PLC is expected to under-perform the New Residential. In addition to that, Triad Group is 2.6 times more volatile than New Residential Investment. It trades about -0.07 of its total potential returns per unit of risk. New Residential Investment is currently generating about 0.31 per unit of volatility. If you would invest 1,064 in New Residential Investment on September 1, 2024 and sell it today you would earn a total of 66.00 from holding New Residential Investment or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Triad Group PLC vs. New Residential Investment
Performance |
| Timeline |
| Triad Group PLC |
| New Residential Inve |
Triad Group and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and New Residential
The main advantage of trading using opposite Triad Group and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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.| Triad Group vs. Axfood AB | Triad Group vs. EVS Broadcast Equipment | Triad Group vs. Premier Foods PLC | Triad Group vs. Silvercorp Metals |
| New Residential vs. Uniper SE | New Residential vs. Mulberry Group PLC | New Residential vs. London Security Plc | New Residential vs. Triad Group PLC |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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