Correlation Between Integrated Diagnostics and New Residential

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

By analyzing existing cross correlation between Integrated Diagnostics Holdings and New Residential Investment, you can compare the effects of market volatilities on Integrated Diagnostics 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 Integrated Diagnostics with a short position of New Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Diagnostics and New Residential.

Diversification Opportunities for Integrated Diagnostics and New Residential

-0.4

Correlation Coefficient

Integrated Diagnostics  New Residential

Very good diversification

The 3 months correlation between Integrated and New is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Diagnostics Holding 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 Integrated Diagnostics 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 Integrated Diagnostics Holdings 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 Integrated Diagnostics i.e., Integrated Diagnostics and New Residential go up and down completely randomly.

Pair Corralation between Integrated Diagnostics and New Residential

Assuming the 90 days trading horizon Integrated Diagnostics Holdings is expected to generate 1.89 times more return on investment than New Residential. However, Integrated Diagnostics is 1.89 times more volatile than New Residential Investment. It trades about 0.13 of its potential returns per unit of risk. New Residential Investment is currently generating about 0.07 per unit of risk. If you would invest  43.00  in Integrated Diagnostics Holdings on October 6, 2024 and sell it today you would earn a total of  3.00  from holding Integrated Diagnostics Holdings or generate 6.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Integrated Diagnostics Holding  vs.  New Residential Investment

Integrated Diagnostics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Diagnostics Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Integrated Diagnostics unveiled solid returns over the last few months and may actually be approaching a breakup point.

New Residential Inve

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in New Residential Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, New Residential may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Integrated Diagnostics and New Residential

The main advantage of trading using opposite Integrated Diagnostics and New Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Diagnostics 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.

The idea behind Integrated Diagnostics Holdings and New Residential Investment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.