Correlation Between Equity Commonwealth and KBS Real
Can any of the company-specific risk be diversified away by investing in both Equity Commonwealth and KBS Real 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 Equity Commonwealth and KBS Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Commonwealth and KBS Real Estate, you can compare the effects of market volatilities on Equity Commonwealth and KBS Real 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 Equity Commonwealth with a short position of KBS Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Commonwealth and KBS Real.
Diversification Opportunities for Equity Commonwealth and KBS Real
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equity and KBS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Equity Commonwealth and KBS Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBS Real Estate and Equity Commonwealth 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 Equity Commonwealth are associated (or correlated) with KBS Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBS Real Estate has no effect on the direction of Equity Commonwealth i.e., Equity Commonwealth and KBS Real go up and down completely randomly.
Pair Corralation between Equity Commonwealth and KBS Real
Considering the 90-day investment horizon Equity Commonwealth is expected to under-perform the KBS Real. In addition to that, Equity Commonwealth is 2.28 times more volatile than KBS Real Estate. It trades about -0.15 of its total potential returns per unit of risk. KBS Real Estate is currently generating about 0.03 per unit of volatility. If you would invest 100.00 in KBS Real Estate on September 12, 2024 and sell it today you would earn a total of 0.00 from holding KBS Real Estate or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Commonwealth vs. KBS Real Estate
Performance |
| Timeline |
| Equity Commonwealth |
| KBS Real Estate |
Equity Commonwealth and KBS Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Commonwealth and KBS Real
The main advantage of trading using opposite Equity Commonwealth and KBS Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Commonwealth position performs unexpectedly, KBS Real 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 KBS Real will offset losses from the drop in KBS Real's long position.| Equity Commonwealth vs. Cousins Properties Incorporated | Equity Commonwealth vs. Highwoods Properties | Equity Commonwealth vs. Douglas Emmett | Equity Commonwealth vs. Kilroy Realty Corp |
| KBS Real vs. Highwoods Properties | KBS Real vs. Piedmont Office Realty | KBS Real vs. Douglas Emmett | KBS Real vs. Kilroy Realty Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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