Correlation Between Empire State and Kedge Construction
Can any of the company-specific risk be diversified away by investing in both Empire State and Kedge Construction 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 Empire State and Kedge Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Kedge Construction Co, you can compare the effects of market volatilities on Empire State and Kedge Construction 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 Empire State with a short position of Kedge Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Kedge Construction.
Diversification Opportunities for Empire State and Kedge Construction
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and Kedge is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Kedge Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kedge Construction and Empire State 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 Empire State Realty are associated (or correlated) with Kedge Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kedge Construction has no effect on the direction of Empire State i.e., Empire State and Kedge Construction go up and down completely randomly.
Pair Corralation between Empire State and Kedge Construction
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.81 times more return on investment than Kedge Construction. However, Empire State Realty is 1.24 times less risky than Kedge Construction. It trades about 0.06 of its potential returns per unit of risk. Kedge Construction Co is currently generating about 0.01 per unit of risk. If you would invest 871.00 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 225.00 from holding Empire State Realty or generate 25.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.51% |
| Values | Daily Returns |
Empire State Realty vs. Kedge Construction Co
Performance |
| Timeline |
| Empire State Realty |
| Kedge Construction |
Empire State and Kedge Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Kedge Construction
The main advantage of trading using opposite Empire State and Kedge Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Kedge Construction 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 Kedge Construction will offset losses from the drop in Kedge Construction's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Kedge Construction vs. BES Engineering Co | Kedge Construction vs. Continental Holdings Corp | Kedge Construction vs. Kee Tai Properties | Kedge Construction vs. Hung Sheng Construction |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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