Correlation Between New Concept and Opendoor Technologies

Can any of the company-specific risk be diversified away by investing in both New Concept and Opendoor Technologies 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 Concept and Opendoor Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between New Concept Energy and Opendoor Technologies, you can compare the effects of market volatilities on New Concept and Opendoor Technologies 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 Concept with a short position of Opendoor Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Concept and Opendoor Technologies.

Diversification Opportunities for New Concept and Opendoor Technologies

0.62

Correlation Coefficient

New Concept  Opendoor Technologies

Poor diversification

The 3 months correlation between New and Opendoor is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding New Concept Energy and Opendoor Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opendoor Technologies and New Concept 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 Concept Energy are associated (or correlated) with Opendoor Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opendoor Technologies has no effect on the direction of New Concept i.e., New Concept and Opendoor Technologies go up and down completely randomly.

Pair Corralation between New Concept and Opendoor Technologies

Considering the 90-day investment horizon New Concept Energy is expected to under-perform the Opendoor Technologies. But the stock apears to be less risky and, when comparing its historical volatility, New Concept Energy is 1.25 times less risky than Opendoor Technologies. The stock trades about -0.13 of its potential returns per unit of risk. The Opendoor Technologies is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  161.00  in Opendoor Technologies on December 28, 2024 and sell it today you would lose (44.00) from holding Opendoor Technologies or give up 27.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

New Concept Energy  vs.  Opendoor Technologies

New Concept Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days New Concept Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Opendoor Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Opendoor Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with New Concept and Opendoor Technologies

The main advantage of trading using opposite New Concept and Opendoor Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Concept position performs unexpectedly, Opendoor Technologies 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 Opendoor Technologies will offset losses from the drop in Opendoor Technologies' long position.

The idea behind New Concept Energy and Opendoor Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.