Correlation Between New Wave and Hall Of

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

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

Diversification Opportunities for New Wave and Hall Of

-0.16

Correlation Coefficient

New Wave  Hall Of

Good diversification

The 3 months correlation between New and Hall is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding New Wave Holdings and Hall of Fame in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hall of Fame and New Wave 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 Wave Holdings are associated (or correlated) with Hall Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hall of Fame has no effect on the direction of New Wave i.e., New Wave and Hall Of go up and down completely randomly.

Pair Corralation between New Wave and Hall Of

Assuming the 90 days horizon New Wave Holdings is expected to generate 1.18 times more return on investment than Hall Of. However, New Wave is 1.18 times more volatile than Hall of Fame. It trades about 0.11 of its potential returns per unit of risk. Hall of Fame is currently generating about 0.09 per unit of risk. If you would invest  0.80  in New Wave Holdings on September 5, 2024 and sell it today you would earn a total of  0.41  from holding New Wave Holdings or generate 51.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

New Wave Holdings  vs.  Hall of Fame

New Wave Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in New Wave Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, New Wave reported solid returns over the last few months and may actually be approaching a breakup point.

Hall of Fame

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hall of Fame are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Hall Of showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with New Wave and Hall Of

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

The idea behind New Wave Holdings and Hall of Fame 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..