Correlation Between Alstria Office and Freeport McMoRan
Can any of the company-specific risk be diversified away by investing in both Alstria Office and Freeport McMoRan 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 Alstria Office and Freeport McMoRan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and Freeport McMoRan, you can compare the effects of market volatilities on Alstria Office and Freeport McMoRan 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 Alstria Office with a short position of Freeport McMoRan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Freeport McMoRan.
Diversification Opportunities for Alstria Office and Freeport McMoRan
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alstria and Freeport is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and Freeport McMoRan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan and Alstria Office 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 alstria office REIT AG are associated (or correlated) with Freeport McMoRan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan has no effect on the direction of Alstria Office i.e., Alstria Office and Freeport McMoRan go up and down completely randomly.
Pair Corralation between Alstria Office and Freeport McMoRan
Assuming the 90 days trading horizon alstria office REIT AG is expected to generate 1.36 times more return on investment than Freeport McMoRan. However, Alstria Office is 1.36 times more volatile than Freeport McMoRan. It trades about 0.35 of its potential returns per unit of risk. Freeport McMoRan is currently generating about -0.19 per unit of risk. If you would invest 461.00 in alstria office REIT AG on October 12, 2024 and sell it today you would earn a total of 76.00 from holding alstria office REIT AG or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Freeport McMoRan
Performance |
| Timeline |
| alstria office REIT |
| Freeport McMoRan |
Alstria Office and Freeport McMoRan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Freeport McMoRan
The main advantage of trading using opposite Alstria Office and Freeport McMoRan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, Freeport McMoRan 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 Freeport McMoRan will offset losses from the drop in Freeport McMoRan's long position.| Alstria Office vs. Spire Healthcare Group | Alstria Office vs. British American Tobacco | Alstria Office vs. Costco Wholesale Corp | Alstria Office vs. HCA Healthcare |
| Freeport McMoRan vs. New Residential Investment | Freeport McMoRan vs. alstria office REIT AG | Freeport McMoRan vs. Taylor Maritime Investments | Freeport McMoRan vs. Beazer Homes USA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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