Correlation Between MT Bank and Alstria Office
Can any of the company-specific risk be diversified away by investing in both MT Bank and Alstria Office 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 MT Bank and Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank Corp and alstria office REIT AG, you can compare the effects of market volatilities on MT Bank and Alstria Office 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 MT Bank with a short position of Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Alstria Office.
Diversification Opportunities for MT Bank and Alstria Office
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0JW2 and Alstria is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT and MT Bank 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 MT Bank Corp are associated (or correlated) with Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of MT Bank i.e., MT Bank and Alstria Office go up and down completely randomly.
Pair Corralation between MT Bank and Alstria Office
Assuming the 90 days trading horizon MT Bank is expected to generate 7.5 times less return on investment than Alstria Office. But when comparing it to its historical volatility, MT Bank Corp is 6.89 times less risky than Alstria Office. It trades about 0.11 of its potential returns per unit of risk. alstria office REIT AG is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 485.00 in alstria office REIT AG on October 25, 2024 and sell it today you would earn a total of 68.00 from holding alstria office REIT AG or generate 14.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
MT Bank Corp vs. alstria office REIT AG
Performance |
| Timeline |
| MT Bank Corp |
| alstria office REIT |
MT Bank and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and Alstria Office
The main advantage of trading using opposite MT Bank and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| MT Bank vs. Costco Wholesale Corp | MT Bank vs. Games Workshop Group | MT Bank vs. Hochschild Mining plc | MT Bank vs. Tata Steel Limited |
| Alstria Office vs. Hammerson PLC | Alstria Office vs. Workspace Group PLC | Alstria Office vs. Supermarket Income REIT | Alstria Office vs. Coor Service Management |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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