Correlation Between WFD Unibail and Tanger Factory
Can any of the company-specific risk be diversified away by investing in both WFD Unibail and Tanger Factory 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 WFD Unibail and Tanger Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WFD Unibail Rodamco and Tanger Factory Outlet, you can compare the effects of market volatilities on WFD Unibail and Tanger Factory 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 WFD Unibail with a short position of Tanger Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of WFD Unibail and Tanger Factory.
Diversification Opportunities for WFD Unibail and Tanger Factory
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WFD and Tanger is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding WFD Unibail Rodamco and Tanger Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanger Factory Outlet and WFD Unibail 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 WFD Unibail Rodamco are associated (or correlated) with Tanger Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanger Factory Outlet has no effect on the direction of WFD Unibail i.e., WFD Unibail and Tanger Factory go up and down completely randomly.
Pair Corralation between WFD Unibail and Tanger Factory
Assuming the 90 days trading horizon WFD Unibail is expected to generate 1.43 times less return on investment than Tanger Factory. In addition to that, WFD Unibail is 1.08 times more volatile than Tanger Factory Outlet. It trades about 0.09 of its total potential returns per unit of risk. Tanger Factory Outlet is currently generating about 0.14 per unit of volatility. If you would invest 2,147 in Tanger Factory Outlet on August 26, 2024 and sell it today you would earn a total of 1,310 from holding Tanger Factory Outlet or generate 61.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WFD Unibail Rodamco vs. Tanger Factory Outlet
Performance |
| Timeline |
| WFD Unibail Rodamco |
| Tanger Factory Outlet |
WFD Unibail and Tanger Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WFD Unibail and Tanger Factory
The main advantage of trading using opposite WFD Unibail and Tanger Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WFD Unibail position performs unexpectedly, Tanger Factory 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 Tanger Factory will offset losses from the drop in Tanger Factory's long position.| WFD Unibail vs. PLAYSTUDIOS A DL 0001 | WFD Unibail vs. PLAY2CHILL SA ZY | WFD Unibail vs. Universal Display | WFD Unibail vs. MAVEN WIRELESS SWEDEN |
| Tanger Factory vs. URW EO 05 | Tanger Factory vs. WFD Unibail Rodamco | Tanger Factory vs. Capital Counties Properties |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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