Correlation Between Cromwell Property and Eureka Group
Can any of the company-specific risk be diversified away by investing in both Cromwell Property and Eureka Group 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 Cromwell Property and Eureka Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cromwell Property Group and Eureka Group Holdings, you can compare the effects of market volatilities on Cromwell Property and Eureka Group 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 Cromwell Property with a short position of Eureka Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Eureka Group.
Diversification Opportunities for Cromwell Property and Eureka Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cromwell and Eureka is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Eureka Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eureka Group Holdings and Cromwell Property 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 Cromwell Property Group are associated (or correlated) with Eureka Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eureka Group Holdings has no effect on the direction of Cromwell Property i.e., Cromwell Property and Eureka Group go up and down completely randomly.
Pair Corralation between Cromwell Property and Eureka Group
Assuming the 90 days trading horizon Cromwell Property Group is expected to generate 1.34 times more return on investment than Eureka Group. However, Cromwell Property is 1.34 times more volatile than Eureka Group Holdings. It trades about -0.09 of its potential returns per unit of risk. Eureka Group Holdings is currently generating about -0.27 per unit of risk. If you would invest 41.00 in Cromwell Property Group on August 30, 2024 and sell it today you would lose (2.00) from holding Cromwell Property Group or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cromwell Property Group vs. Eureka Group Holdings
Performance |
| Timeline |
| Cromwell Property |
| Eureka Group Holdings |
Cromwell Property and Eureka Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Eureka Group
The main advantage of trading using opposite Cromwell Property and Eureka Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property position performs unexpectedly, Eureka Group 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 Eureka Group will offset losses from the drop in Eureka Group's long position.| Cromwell Property vs. Australian United Investment | Cromwell Property vs. Diversified United Investment | Cromwell Property vs. Air New Zealand | Cromwell Property vs. Carlton Investments |
| Eureka Group vs. Scentre Group | Eureka Group vs. Vicinity Centres Re | Eureka Group vs. Charter Hall Retail | Eureka Group vs. Cromwell Property Group |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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