Correlation Between Alstria Office and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Alstria Office and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Alstria Office and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and International Consolidated.
Diversification Opportunities for Alstria Office and International Consolidated
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alstria and International is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Alstria Office i.e., Alstria Office and International Consolidated go up and down completely randomly.
Pair Corralation between Alstria Office and International Consolidated
Assuming the 90 days horizon alstria office REIT AG is expected to under-perform the International Consolidated. In addition to that, Alstria Office is 3.48 times more volatile than International Consolidated Airlines. It trades about -0.22 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.12 per unit of volatility. If you would invest 342.00 in International Consolidated Airlines on October 11, 2024 and sell it today you would earn a total of 14.00 from holding International Consolidated Airlines or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. International Consolidated Air
Performance |
| Timeline |
| alstria office REIT |
| International Consolidated |
Alstria Office and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and International Consolidated
The main advantage of trading using opposite Alstria Office and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Alstria Office vs. Canadian Utilities Limited | Alstria Office vs. Algonquin Power Utilities | Alstria Office vs. UNITED RENTALS | Alstria Office vs. United Breweries Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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