Correlation Between New Era and Red Oak
Can any of the company-specific risk be diversified away by investing in both New Era and Red Oak 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 Era and Red Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Era Energy and Red Oak Technology, you can compare the effects of market volatilities on New Era and Red Oak 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 Era with a short position of Red Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Era and Red Oak.
Diversification Opportunities for New Era and Red Oak
Pay attention - limited upside
The 3 months correlation between New and Red is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding New Era Energy and Red Oak Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Oak Technology and New Era 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 Era Energy are associated (or correlated) with Red Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Oak Technology has no effect on the direction of New Era i.e., New Era and Red Oak go up and down completely randomly.
Pair Corralation between New Era and Red Oak
Given the investment horizon of 90 days New Era is expected to generate 5.61 times less return on investment than Red Oak. In addition to that, New Era is 7.91 times more volatile than Red Oak Technology. It trades about 0.01 of its total potential returns per unit of risk. Red Oak Technology is currently generating about 0.28 per unit of volatility. If you would invest 4,703 in Red Oak Technology on May 29, 2025 and sell it today you would earn a total of 759.00 from holding Red Oak Technology or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Era Energy vs. Red Oak Technology
Performance |
| Timeline |
| New Era Energy |
| Red Oak Technology |
New Era and Red Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Era and Red Oak
The main advantage of trading using opposite New Era and Red Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Era position performs unexpectedly, Red Oak 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 Red Oak will offset losses from the drop in Red Oak's long position.The idea behind New Era Energy and Red Oak Technology 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.| Red Oak vs. Pin Oak Equity | Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |