Correlation Between Cromwell Property and Prologis
Can any of the company-specific risk be diversified away by investing in both Cromwell Property and Prologis 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 Prologis 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 Prologis, you can compare the effects of market volatilities on Cromwell Property and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Prologis.
Diversification Opportunities for Cromwell Property and Prologis
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cromwell and Prologis is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of Cromwell Property i.e., Cromwell Property and Prologis go up and down completely randomly.
Pair Corralation between Cromwell Property and Prologis
Assuming the 90 days horizon Cromwell Property Group is expected to under-perform the Prologis. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cromwell Property Group is 2.17 times less risky than Prologis. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Prologis is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,768 in Prologis on September 3, 2024 and sell it today you would earn a total of 1,132 from holding Prologis or generate 23.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.69% |
| Values | Daily Returns |
Cromwell Property Group vs. Prologis
Performance |
| Timeline |
| Cromwell Property |
| Prologis |
Cromwell Property and Prologis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Prologis
The main advantage of trading using opposite Cromwell Property and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property position performs unexpectedly, Prologis 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 Prologis will offset losses from the drop in Prologis' long position.| Cromwell Property vs. Sphere Entertainment Co | Cromwell Property vs. Tesla Inc | Cromwell Property vs. CarsalesCom Ltd ADR | Cromwell Property vs. Wabash National |
| Prologis vs. Rexford Industrial Realty | Prologis vs. LXP Industrial Trust | Prologis vs. Public Storage | Prologis vs. Rexford Industrial Realty |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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