Correlation Between Empire State and Brandes Core
Can any of the company-specific risk be diversified away by investing in both Empire State and Brandes Core 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 Brandes Core 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 Brandes E Plus, you can compare the effects of market volatilities on Empire State and Brandes Core 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 Brandes Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Brandes Core.
Diversification Opportunities for Empire State and Brandes Core
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Empire and Brandes is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Brandes E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes E Plus 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 Brandes Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes E Plus has no effect on the direction of Empire State i.e., Empire State and Brandes Core go up and down completely randomly.
Pair Corralation between Empire State and Brandes Core
Given the investment horizon of 90 days Empire State Realty is expected to generate 3.88 times more return on investment than Brandes Core. However, Empire State is 3.88 times more volatile than Brandes E Plus. It trades about 0.11 of its potential returns per unit of risk. Brandes E Plus is currently generating about 0.05 per unit of risk. If you would invest 1,076 in Empire State Realty on August 30, 2024 and sell it today you would earn a total of 32.00 from holding Empire State Realty or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Brandes E Plus
Performance |
| Timeline |
| Empire State Realty |
| Brandes E Plus |
Empire State and Brandes Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Brandes Core
The main advantage of trading using opposite Empire State and Brandes Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Brandes Core 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 Brandes Core will offset losses from the drop in Brandes Core's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Brandes Core vs. Volumetric Fund Volumetric | Brandes Core vs. Balanced Fund Investor | Brandes Core vs. Rbb Fund | Brandes Core vs. Abr 7525 Volatility |
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 Correlations module to find global opportunities by holding instruments from different markets.
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