Correlation Between Everest and New York

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

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

Diversification Opportunities for Everest and New York

-0.54

Correlation Coefficient

Everest  New York

Excellent diversification

The 3 months correlation between Everest and New is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage and Everest 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 Everest Group are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Everest i.e., Everest and New York go up and down completely randomly.

Pair Corralation between Everest and New York

Allowing for the 90-day total investment horizon Everest Group is expected to under-perform the New York. In addition to that, Everest is 3.19 times more volatile than New York Mortgage. It trades about -0.04 of its total potential returns per unit of risk. New York Mortgage is currently generating about 0.16 per unit of volatility. If you would invest  2,384  in New York Mortgage on May 6, 2025 and sell it today you would earn a total of  93.00  from holding New York Mortgage or generate 3.9% return on investment over 90 days.

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

Everest Group  vs.  New York Mortgage

Everest Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everest Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Everest is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

New York Mortgage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in New York Mortgage are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, New York is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Everest and New York

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

The idea behind Everest Group and New York Mortgage 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 Stocks Directory module to find actively traded stocks across global markets.