Correlation Between COPT Defense and Empire State
Can any of the company-specific risk be diversified away by investing in both COPT Defense and Empire State 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 COPT Defense and Empire State into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COPT Defense Properties and Empire State Realty, you can compare the effects of market volatilities on COPT Defense and Empire State 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 COPT Defense with a short position of Empire State. Check out your portfolio center. Please also check ongoing floating volatility patterns of COPT Defense and Empire State.
Diversification Opportunities for COPT Defense and Empire State
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COPT and Empire is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding COPT Defense Properties and Empire State Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire State Realty and COPT Defense 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 COPT Defense Properties are associated (or correlated) with Empire State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire State Realty has no effect on the direction of COPT Defense i.e., COPT Defense and Empire State go up and down completely randomly.
Pair Corralation between COPT Defense and Empire State
Considering the 90-day investment horizon COPT Defense Properties is expected to generate 0.4 times more return on investment than Empire State. However, COPT Defense Properties is 2.5 times less risky than Empire State. It trades about 0.1 of its potential returns per unit of risk. Empire State Realty is currently generating about 0.01 per unit of risk. If you would invest 3,038 in COPT Defense Properties on August 26, 2024 and sell it today you would earn a total of 146.00 from holding COPT Defense Properties or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
COPT Defense Properties vs. Empire State Realty
Performance |
| Timeline |
| COPT Defense Properties |
| Empire State Realty |
COPT Defense and Empire State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COPT Defense and Empire State
The main advantage of trading using opposite COPT Defense and Empire State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPT Defense position performs unexpectedly, Empire State 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 Empire State will offset losses from the drop in Empire State's long position.| COPT Defense vs. Realty Income | COPT Defense vs. First Industrial Realty | COPT Defense vs. Healthcare Realty Trust | COPT Defense vs. Park Hotels Resorts |
| Empire State vs. Empire State Realty | Empire State vs. City Office | Empire State vs. Cousins Properties Incorporated | Empire State vs. Postal Realty Trust |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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