Correlation Between BA Airport and Micro Leasing
Can any of the company-specific risk be diversified away by investing in both BA Airport and Micro Leasing 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 BA Airport and Micro Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BA Airport Leasehold and Micro Leasing Public, you can compare the effects of market volatilities on BA Airport and Micro Leasing 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 BA Airport with a short position of Micro Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of BA Airport and Micro Leasing.
Diversification Opportunities for BA Airport and Micro Leasing
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BAREIT and Micro is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BA Airport Leasehold and Micro Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Leasing Public and BA Airport 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 BA Airport Leasehold are associated (or correlated) with Micro Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Leasing Public has no effect on the direction of BA Airport i.e., BA Airport and Micro Leasing go up and down completely randomly.
Pair Corralation between BA Airport and Micro Leasing
Assuming the 90 days trading horizon BA Airport Leasehold is expected to generate 0.32 times more return on investment than Micro Leasing. However, BA Airport Leasehold is 3.09 times less risky than Micro Leasing. It trades about 0.02 of its potential returns per unit of risk. Micro Leasing Public is currently generating about -0.07 per unit of risk. If you would invest 885.00 in BA Airport Leasehold on September 1, 2024 and sell it today you would earn a total of 55.00 from holding BA Airport Leasehold or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BA Airport Leasehold vs. Micro Leasing Public
Performance |
| Timeline |
| BA Airport Leasehold |
| Micro Leasing Public |
BA Airport and Micro Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BA Airport and Micro Leasing
The main advantage of trading using opposite BA Airport and Micro Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BA Airport position performs unexpectedly, Micro Leasing 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 Micro Leasing will offset losses from the drop in Micro Leasing's long position.| BA Airport vs. LH Shopping Centers | BA Airport vs. HEMARAJ INDUSTRIAL PROPERTY | BA Airport vs. Land and Houses |
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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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