Correlation Between Empire State and Boustead Heavy
Can any of the company-specific risk be diversified away by investing in both Empire State and Boustead Heavy 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 Boustead Heavy 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 Boustead Heavy Industries, you can compare the effects of market volatilities on Empire State and Boustead Heavy 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 Boustead Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Boustead Heavy.
Diversification Opportunities for Empire State and Boustead Heavy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and Boustead is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Boustead Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boustead Heavy Industries 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 Boustead Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boustead Heavy Industries has no effect on the direction of Empire State i.e., Empire State and Boustead Heavy go up and down completely randomly.
Pair Corralation between Empire State and Boustead Heavy
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Boustead Heavy. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 1.46 times less risky than Boustead Heavy. The stock trades about -0.28 of its potential returns per unit of risk. The Boustead Heavy Industries is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Boustead Heavy Industries on November 28, 2024 and sell it today you would lose (3.00) from holding Boustead Heavy Industries or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Empire State Realty vs. Boustead Heavy Industries
Performance |
| Timeline |
| Empire State Realty |
| Boustead Heavy Industries |
Empire State and Boustead Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Boustead Heavy
The main advantage of trading using opposite Empire State and Boustead Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Boustead Heavy 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 Boustead Heavy will offset losses from the drop in Boustead Heavy's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Boustead Heavy vs. Cengild Medical Berhad | Boustead Heavy vs. Al Aqar Healthcare | Boustead Heavy vs. Southern Steel Bhd | Boustead Heavy vs. CSC Steel Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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