Correlation Between Cofinimmo and Care Property
Can any of the company-specific risk be diversified away by investing in both Cofinimmo and Care Property 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 Cofinimmo and Care Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cofinimmo SA and Care Property Invest, you can compare the effects of market volatilities on Cofinimmo and Care Property 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 Cofinimmo with a short position of Care Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofinimmo and Care Property.
Diversification Opportunities for Cofinimmo and Care Property
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cofinimmo and Care is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cofinimmo SA and Care Property Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Care Property Invest and Cofinimmo 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 Cofinimmo SA are associated (or correlated) with Care Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Care Property Invest has no effect on the direction of Cofinimmo i.e., Cofinimmo and Care Property go up and down completely randomly.
Pair Corralation between Cofinimmo and Care Property
Assuming the 90 days trading horizon Cofinimmo SA is expected to under-perform the Care Property. But the stock apears to be less risky and, when comparing its historical volatility, Cofinimmo SA is 1.06 times less risky than Care Property. The stock trades about -0.03 of its potential returns per unit of risk. The Care Property Invest is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,363 in Care Property Invest on August 27, 2024 and sell it today you would lose (133.00) from holding Care Property Invest or give up 9.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cofinimmo SA vs. Care Property Invest
Performance |
| Timeline |
| Cofinimmo SA |
| Care Property Invest |
Cofinimmo and Care Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cofinimmo and Care Property
The main advantage of trading using opposite Cofinimmo and Care Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofinimmo position performs unexpectedly, Care Property 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 Care Property will offset losses from the drop in Care Property's long position.| Cofinimmo vs. Home Invest Belgium | Cofinimmo vs. Wereldhav B Sicafi | Cofinimmo vs. Retail Estates | Cofinimmo vs. Exmar NV |
| Care Property vs. Home Invest Belgium | Care Property vs. Wereldhav B Sicafi | Care Property vs. Retail Estates | Care Property vs. Exmar NV |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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