Correlation Between EDP - and SITE Centers
Can any of the company-specific risk be diversified away by investing in both EDP - and SITE Centers 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 EDP - and SITE Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EDP Energias and SITE Centers Corp, you can compare the effects of market volatilities on EDP - and SITE Centers 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 EDP - with a short position of SITE Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDP - and SITE Centers.
Diversification Opportunities for EDP - and SITE Centers
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EDP and SITE is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding EDP Energias and SITE Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITE Centers Corp and EDP - 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 EDP Energias are associated (or correlated) with SITE Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITE Centers Corp has no effect on the direction of EDP - i.e., EDP - and SITE Centers go up and down completely randomly.
Pair Corralation between EDP - and SITE Centers
Assuming the 90 days horizon EDP Energias is expected to under-perform the SITE Centers. In addition to that, EDP - is 2.39 times more volatile than SITE Centers Corp. It trades about -0.05 of its total potential returns per unit of risk. SITE Centers Corp is currently generating about 0.02 per unit of volatility. If you would invest 2,310 in SITE Centers Corp on September 4, 2024 and sell it today you would earn a total of 114.00 from holding SITE Centers Corp or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.72% |
| Values | Daily Returns |
EDP Energias vs. SITE Centers Corp
Performance |
| Timeline |
| EDP Energias |
| SITE Centers Corp |
EDP - and SITE Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EDP - and SITE Centers
The main advantage of trading using opposite EDP - and SITE Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EDP - position performs unexpectedly, SITE Centers 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 SITE Centers will offset losses from the drop in SITE Centers' long position.The idea behind EDP Energias and SITE Centers Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SITE Centers vs. Algoma Steel Group | SITE Centers vs. Sanyo Special Steel | SITE Centers vs. Olympic Steel | SITE Centers vs. Patterson UTI Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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