Correlation Between INVITATION HOMES and Alstria Office
Can any of the company-specific risk be diversified away by investing in both INVITATION HOMES 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 INVITATION HOMES and Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INVITATION HOMES DL and alstria office REIT AG, you can compare the effects of market volatilities on INVITATION HOMES 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 INVITATION HOMES with a short position of Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of INVITATION HOMES and Alstria Office.
Diversification Opportunities for INVITATION HOMES and Alstria Office
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INVITATION and Alstria is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding INVITATION HOMES DL 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 INVITATION HOMES 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 INVITATION HOMES DL 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 INVITATION HOMES i.e., INVITATION HOMES and Alstria Office go up and down completely randomly.
Pair Corralation between INVITATION HOMES and Alstria Office
Assuming the 90 days horizon INVITATION HOMES is expected to generate 32.82 times less return on investment than Alstria Office. But when comparing it to its historical volatility, INVITATION HOMES DL is 2.95 times less risky than Alstria Office. It trades about 0.01 of its potential returns per unit of risk. alstria office REIT AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 337.00 in alstria office REIT AG on October 16, 2024 and sell it today you would earn a total of 197.00 from holding alstria office REIT AG or generate 58.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INVITATION HOMES DL vs. alstria office REIT AG
Performance |
| Timeline |
| INVITATION HOMES |
| alstria office REIT |
INVITATION HOMES and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INVITATION HOMES and Alstria Office
The main advantage of trading using opposite INVITATION HOMES and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INVITATION HOMES 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.| INVITATION HOMES vs. COFCO Joycome Foods | INVITATION HOMES vs. CN MODERN DAIRY | INVITATION HOMES vs. United Natural Foods | INVITATION HOMES vs. Xiwang Special Steel |
| Alstria Office vs. United Airlines Holdings | Alstria Office vs. BJs Restaurants | Alstria Office vs. MOVIE GAMES SA | Alstria Office vs. Aegean Airlines SA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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