Correlation Between Alstria Office and Balfour Beatty
Can any of the company-specific risk be diversified away by investing in both Alstria Office and Balfour Beatty 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 Balfour Beatty 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 Balfour Beatty plc, you can compare the effects of market volatilities on Alstria Office and Balfour Beatty 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 Balfour Beatty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Balfour Beatty.
Diversification Opportunities for Alstria Office and Balfour Beatty
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alstria and Balfour is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and Balfour Beatty plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balfour Beatty plc 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 Balfour Beatty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balfour Beatty plc has no effect on the direction of Alstria Office i.e., Alstria Office and Balfour Beatty go up and down completely randomly.
Pair Corralation between Alstria Office and Balfour Beatty
Assuming the 90 days trading horizon alstria office REIT AG is expected to generate 7.58 times more return on investment than Balfour Beatty. However, Alstria Office is 7.58 times more volatile than Balfour Beatty plc. It trades about 0.12 of its potential returns per unit of risk. Balfour Beatty plc is currently generating about -0.04 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Balfour Beatty plc
Performance |
| Timeline |
| alstria office REIT |
| Balfour Beatty plc |
Alstria Office and Balfour Beatty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Balfour Beatty
The main advantage of trading using opposite Alstria Office and Balfour Beatty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, Balfour Beatty 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 Balfour Beatty will offset losses from the drop in Balfour Beatty's long position.| Alstria Office vs. Hammerson PLC | Alstria Office vs. Workspace Group PLC | Alstria Office vs. Supermarket Income REIT | Alstria Office vs. Coor Service Management |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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