Correlation Between Empire State and Eva Airways
Can any of the company-specific risk be diversified away by investing in both Empire State and Eva Airways 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 Eva Airways 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 Eva Airways Corp, you can compare the effects of market volatilities on Empire State and Eva Airways 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 Eva Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Eva Airways.
Diversification Opportunities for Empire State and Eva Airways
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Empire and Eva is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Eva Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Airways Corp 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 Eva Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Airways Corp has no effect on the direction of Empire State i.e., Empire State and Eva Airways go up and down completely randomly.
Pair Corralation between Empire State and Eva Airways
Given the investment horizon of 90 days Empire State is expected to generate 1.1 times less return on investment than Eva Airways. But when comparing it to its historical volatility, Empire State Realty is 1.13 times less risky than Eva Airways. It trades about 0.09 of its potential returns per unit of risk. Eva Airways Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,535 in Eva Airways Corp on September 1, 2024 and sell it today you would earn a total of 620.00 from holding Eva Airways Corp or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Empire State Realty vs. Eva Airways Corp
Performance |
| Timeline |
| Empire State Realty |
| Eva Airways Corp |
Empire State and Eva Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Eva Airways
The main advantage of trading using opposite Empire State and Eva Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Eva Airways 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 Eva Airways will offset losses from the drop in Eva Airways' long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Eva Airways vs. BES Engineering Co | Eva Airways vs. Continental Holdings Corp | Eva Airways vs. Kee Tai Properties | Eva Airways 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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