Correlation Between Empire State and Bonterra Resources
Can any of the company-specific risk be diversified away by investing in both Empire State and Bonterra Resources 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 Bonterra Resources 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 Bonterra Resources, you can compare the effects of market volatilities on Empire State and Bonterra Resources 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 Bonterra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Bonterra Resources.
Diversification Opportunities for Empire State and Bonterra Resources
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and Bonterra is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Bonterra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonterra Resources 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 Bonterra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonterra Resources has no effect on the direction of Empire State i.e., Empire State and Bonterra Resources go up and down completely randomly.
Pair Corralation between Empire State and Bonterra Resources
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.32 times more return on investment than Bonterra Resources. However, Empire State Realty is 3.13 times less risky than Bonterra Resources. It trades about 0.08 of its potential returns per unit of risk. Bonterra Resources is currently generating about 0.02 per unit of risk. If you would invest 686.00 in Empire State Realty on September 2, 2024 and sell it today you would earn a total of 410.00 from holding Empire State Realty or generate 59.77% 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. Bonterra Resources
Performance |
| Timeline |
| Empire State Realty |
| Bonterra Resources |
Empire State and Bonterra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Bonterra Resources
The main advantage of trading using opposite Empire State and Bonterra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Bonterra Resources 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 Bonterra Resources will offset losses from the drop in Bonterra Resources' long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Bonterra Resources vs. Gander Gold | Bonterra Resources vs. Sokoman Minerals Corp | Bonterra Resources vs. Labrador Gold Corp | Bonterra Resources vs. Precipitate Gold 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.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |