Correlation Between Alstria Office and Carsales
Can any of the company-specific risk be diversified away by investing in both Alstria Office and Carsales 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 Carsales 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 CarsalesCom, you can compare the effects of market volatilities on Alstria Office and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Carsales.
Diversification Opportunities for Alstria Office and Carsales
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alstria and Carsales is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Alstria Office i.e., Alstria Office and Carsales go up and down completely randomly.
Pair Corralation between Alstria Office and Carsales
Assuming the 90 days horizon alstria office REIT AG is expected to generate 2.29 times more return on investment than Carsales. However, Alstria Office is 2.29 times more volatile than CarsalesCom. It trades about 0.07 of its potential returns per unit of risk. CarsalesCom is currently generating about 0.06 per unit of risk. If you would invest 356.00 in alstria office REIT AG on November 3, 2024 and sell it today you would earn a total of 196.00 from holding alstria office REIT AG or generate 55.06% 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. CarsalesCom
Performance |
| Timeline |
| alstria office REIT |
| CarsalesCom |
Alstria Office and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Carsales
The main advantage of trading using opposite Alstria Office and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Alstria Office vs. Digital Realty Trust | Alstria Office vs. Gecina SA | Alstria Office vs. Japan Real Estate | Alstria Office vs. Mirvac Group |
| Carsales vs. The Yokohama Rubber | Carsales vs. The Boston Beer | Carsales vs. Suntory Beverage Food | Carsales vs. Tsingtao Brewery |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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