Correlation Between Allreal Holding and Zug Estates
Can any of the company-specific risk be diversified away by investing in both Allreal Holding and Zug Estates 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 Allreal Holding and Zug Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allreal Holding and Zug Estates Holding, you can compare the effects of market volatilities on Allreal Holding and Zug Estates 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 Allreal Holding with a short position of Zug Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allreal Holding and Zug Estates.
Diversification Opportunities for Allreal Holding and Zug Estates
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allreal and Zug is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Allreal Holding and Zug Estates Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zug Estates Holding and Allreal Holding 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 Allreal Holding are associated (or correlated) with Zug Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zug Estates Holding has no effect on the direction of Allreal Holding i.e., Allreal Holding and Zug Estates go up and down completely randomly.
Pair Corralation between Allreal Holding and Zug Estates
Assuming the 90 days trading horizon Allreal Holding is expected to generate 1.29 times less return on investment than Zug Estates. But when comparing it to its historical volatility, Allreal Holding is 1.63 times less risky than Zug Estates. It trades about 0.11 of its potential returns per unit of risk. Zug Estates Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 189,500 in Zug Estates Holding on August 29, 2024 and sell it today you would earn a total of 4,500 from holding Zug Estates Holding or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allreal Holding vs. Zug Estates Holding
Performance |
| Timeline |
| Allreal Holding |
| Zug Estates Holding |
Allreal Holding and Zug Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allreal Holding and Zug Estates
The main advantage of trading using opposite Allreal Holding and Zug Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allreal Holding position performs unexpectedly, Zug Estates 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 Zug Estates will offset losses from the drop in Zug Estates' long position.| Allreal Holding vs. PSP Swiss Property | Allreal Holding vs. Swiss Prime Site | Allreal Holding vs. Helvetia Holding AG | Allreal Holding vs. Banque Cantonale |
| Zug Estates vs. Allreal Holding | Zug Estates vs. PSP Swiss Property | Zug Estates vs. Mobimo Hldg | Zug Estates vs. Swiss Prime Site |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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