Correlation Between ATRESMEDIA and New Residential
Can any of the company-specific risk be diversified away by investing in both ATRESMEDIA 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 ATRESMEDIA and New Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRESMEDIA and New Residential Investment, you can compare the effects of market volatilities on ATRESMEDIA 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 ATRESMEDIA with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and New Residential.
Diversification Opportunities for ATRESMEDIA and New Residential
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ATRESMEDIA and New is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA i.e., ATRESMEDIA and New Residential go up and down completely randomly.
Pair Corralation between ATRESMEDIA and New Residential
Assuming the 90 days trading horizon ATRESMEDIA is expected to under-perform the New Residential. In addition to that, ATRESMEDIA is 1.05 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 0.16 per unit of volatility. If you would invest 958.00 in New Residential Investment on October 12, 2024 and sell it today you would earn a total of 102.00 from holding New Residential Investment or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
ATRESMEDIA vs. New Residential Investment
Performance |
| Timeline |
| ATRESMEDIA |
| New Residential Inve |
ATRESMEDIA and New Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRESMEDIA and New Residential
The main advantage of trading using opposite ATRESMEDIA and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRESMEDIA 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.| ATRESMEDIA vs. Laureate Education | ATRESMEDIA vs. PennantPark Investment | ATRESMEDIA vs. Grand Canyon Education | ATRESMEDIA vs. American Public Education |
| New Residential vs. SEKISUI CHEMICAL | New Residential vs. ATRESMEDIA | New Residential vs. Sinopec Shanghai Petrochemical | New Residential vs. CNVISION MEDIA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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