Correlation Between Care Property and Warehouses
Can any of the company-specific risk be diversified away by investing in both Care Property and Warehouses 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 Warehouses 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 Warehouses de Pauw, you can compare the effects of market volatilities on Care Property and Warehouses 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 Warehouses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Care Property and Warehouses.
Diversification Opportunities for Care Property and Warehouses
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Care and Warehouses is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Care Property Invest and Warehouses de Pauw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouses de Pauw 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 Warehouses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warehouses de Pauw has no effect on the direction of Care Property i.e., Care Property and Warehouses go up and down completely randomly.
Pair Corralation between Care Property and Warehouses
Assuming the 90 days trading horizon Care Property Invest is expected to generate 1.11 times more return on investment than Warehouses. However, Care Property is 1.11 times more volatile than Warehouses de Pauw. It trades about -0.01 of its potential returns per unit of risk. Warehouses de Pauw is currently generating about -0.04 per unit of risk. 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Care Property Invest vs. Warehouses de Pauw
Performance |
| Timeline |
| Care Property Invest |
| Warehouses de Pauw |
Care Property and Warehouses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Care Property and Warehouses
The main advantage of trading using opposite Care Property and Warehouses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Care Property position performs unexpectedly, Warehouses 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 Warehouses will offset losses from the drop in Warehouses' long position.| Care Property vs. Home Invest Belgium | Care Property vs. Wereldhav B Sicafi | Care Property vs. Retail Estates | Care Property vs. Exmar NV |
| Warehouses vs. Aedifica | Warehouses vs. Cofinimmo SA | Warehouses vs. VGP NV | Warehouses vs. Sofina Socit Anonyme |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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