Correlation Between Continental and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both Continental and DATAGROUP 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 Continental and DATAGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camden Property Trust and DATAGROUP SE, you can compare the effects of market volatilities on Continental and DATAGROUP 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 Continental with a short position of DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental and DATAGROUP.
Diversification Opportunities for Continental and DATAGROUP
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Continental and DATAGROUP is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Camden Property Trust and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE and Continental 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 Camden Property Trust are associated (or correlated) with DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Continental i.e., Continental and DATAGROUP go up and down completely randomly.
Pair Corralation between Continental and DATAGROUP
Assuming the 90 days horizon Camden Property Trust is expected to generate 0.66 times more return on investment than DATAGROUP. However, Camden Property Trust is 1.52 times less risky than DATAGROUP. It trades about 0.03 of its potential returns per unit of risk. DATAGROUP SE is currently generating about -0.01 per unit of risk. If you would invest 9,554 in Camden Property Trust on September 24, 2024 and sell it today you would earn a total of 1,446 from holding Camden Property Trust or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camden Property Trust vs. DATAGROUP SE
Performance |
| Timeline |
| Camden Property Trust |
| DATAGROUP SE |
Continental and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental and DATAGROUP
The main advantage of trading using opposite Continental and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| Continental vs. DATAGROUP SE | Continental vs. Sabra Health Care | Continental vs. Cardinal Health | Continental vs. Automatic Data Processing |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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