Correlation Between Empire State and Manning Napier
Can any of the company-specific risk be diversified away by investing in both Empire State and Manning Napier 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 Manning Napier 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 Manning Napier Callodine, you can compare the effects of market volatilities on Empire State and Manning Napier 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 Manning Napier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Manning Napier.
Diversification Opportunities for Empire State and Manning Napier
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Empire and Manning is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Manning Napier Callodine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manning Napier Callodine 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 Manning Napier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manning Napier Callodine has no effect on the direction of Empire State i.e., Empire State and Manning Napier go up and down completely randomly.
Pair Corralation between Empire State and Manning Napier
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Manning Napier. In addition to that, Empire State is 1.67 times more volatile than Manning Napier Callodine. It trades about -0.28 of its total potential returns per unit of risk. Manning Napier Callodine is currently generating about -0.15 per unit of volatility. If you would invest 1,385 in Manning Napier Callodine on November 28, 2024 and sell it today you would lose (42.00) from holding Manning Napier Callodine or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Manning Napier Callodine
Performance |
| Timeline |
| Empire State Realty |
| Manning Napier Callodine |
Empire State and Manning Napier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Manning Napier
The main advantage of trading using opposite Empire State and Manning Napier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Manning Napier 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 Manning Napier will offset losses from the drop in Manning Napier's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Manning Napier vs. Doubleline Global Bond | Manning Napier vs. Ab Global Bond | Manning Napier vs. Investec Global Franchise | Manning Napier vs. Morningstar Global Income |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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