Correlation Between Newmark and La Rosa

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

By analyzing existing cross correlation between Newmark Group and La Rosa Holdings, you can compare the effects of market volatilities on Newmark and La Rosa 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 Newmark with a short position of La Rosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmark and La Rosa.

Diversification Opportunities for Newmark and La Rosa

-0.29

Correlation Coefficient

Newmark  La Rosa

Very good diversification

The 3 months correlation between Newmark and LRHC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Newmark Group and La Rosa Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Rosa Holdings and Newmark 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 Newmark Group are associated (or correlated) with La Rosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Rosa Holdings has no effect on the direction of Newmark i.e., Newmark and La Rosa go up and down completely randomly.

Pair Corralation between Newmark and La Rosa

Given the investment horizon of 90 days Newmark Group is expected to generate 0.28 times more return on investment than La Rosa. However, Newmark Group is 3.53 times less risky than La Rosa. It trades about -0.02 of its potential returns per unit of risk. La Rosa Holdings is currently generating about -0.23 per unit of risk. If you would invest  1,276  in Newmark Group on December 28, 2024 and sell it today you would lose (65.00) from holding Newmark Group or give up 5.09% of portfolio value over 90 days.

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

Newmark Group  vs.  La Rosa Holdings

Newmark Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newmark Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Newmark is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

La Rosa Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days La Rosa Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Newmark and La Rosa

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

The idea behind Newmark Group and La Rosa Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.