Correlation Between Care Property and Banimmo SA
Can any of the company-specific risk be diversified away by investing in both Care Property and Banimmo SA 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 Care Property and Banimmo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Care Property Invest and Banimmo SA, you can compare the effects of market volatilities on Care Property and Banimmo SA 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 Care Property with a short position of Banimmo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Care Property and Banimmo SA.
Diversification Opportunities for Care Property and Banimmo SA
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Care and Banimmo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Care Property Invest and Banimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banimmo SA and Care 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 Care Property Invest are associated (or correlated) with Banimmo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banimmo SA has no effect on the direction of Care Property i.e., Care Property and Banimmo SA go up and down completely randomly.
Pair Corralation between Care Property and Banimmo SA
Assuming the 90 days trading horizon Care Property Invest is expected to generate 0.97 times more return on investment than Banimmo SA. However, Care Property Invest is 1.03 times less risky than Banimmo SA. It trades about -0.03 of its potential returns per unit of risk. Banimmo SA is currently generating about -0.05 per unit of risk. If you would invest 1,323 in Care Property Invest on September 12, 2024 and sell it today you would lose (167.00) from holding Care Property Invest or give up 12.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Care Property Invest vs. Banimmo SA
Performance |
| Timeline |
| Care Property Invest |
| Banimmo SA |
Care Property and Banimmo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Care Property and Banimmo SA
The main advantage of trading using opposite Care Property and Banimmo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Care Property position performs unexpectedly, Banimmo SA 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 Banimmo SA will offset losses from the drop in Banimmo SA's long position.| Care Property vs. Aedifica | Care Property vs. Cofinimmo SA | Care Property vs. Xior Student Housing | Care Property vs. VGP NV |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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