Correlation Between Alstria Office and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Alstria Office and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Alstria Office and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Fevertree Drinks.
Diversification Opportunities for Alstria Office and Fevertree Drinks
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alstria and Fevertree is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Alstria Office i.e., Alstria Office and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Alstria Office and Fevertree Drinks
Assuming the 90 days trading horizon alstria office REIT AG is expected to generate 1.47 times more return on investment than Fevertree Drinks. However, Alstria Office is 1.47 times more volatile than Fevertree Drinks Plc. It trades about 0.04 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.03 per unit of risk. If you would invest 529.00 in alstria office REIT AG on September 23, 2024 and sell it today you would earn a total of 232.00 from holding alstria office REIT AG or generate 43.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Fevertree Drinks Plc
Performance |
| Timeline |
| alstria office REIT |
| Fevertree Drinks Plc |
Alstria Office and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Fevertree Drinks
The main advantage of trading using opposite Alstria Office and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Alstria Office vs. Optima Health plc | Alstria Office vs. HCA Healthcare | Alstria Office vs. Cardinal Health | Alstria Office vs. Fevertree Drinks Plc |
| Fevertree Drinks vs. Roebuck Food Group | Fevertree Drinks vs. Austevoll Seafood ASA | Fevertree Drinks vs. Induction Healthcare Group | Fevertree Drinks vs. Hilton Food Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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