Correlation Between Empire State and Groupe CRIT
Can any of the company-specific risk be diversified away by investing in both Empire State and Groupe CRIT 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 Groupe CRIT 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 Groupe CRIT SA, you can compare the effects of market volatilities on Empire State and Groupe CRIT 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 Groupe CRIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Groupe CRIT.
Diversification Opportunities for Empire State and Groupe CRIT
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Empire and Groupe is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Groupe CRIT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe CRIT SA 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 Groupe CRIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe CRIT SA has no effect on the direction of Empire State i.e., Empire State and Groupe CRIT go up and down completely randomly.
Pair Corralation between Empire State and Groupe CRIT
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Groupe CRIT. In addition to that, Empire State is 1.63 times more volatile than Groupe CRIT SA. It trades about -0.31 of its total potential returns per unit of risk. Groupe CRIT SA is currently generating about 0.04 per unit of volatility. If you would invest 5,860 in Groupe CRIT SA on November 27, 2024 and sell it today you would earn a total of 40.00 from holding Groupe CRIT SA or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Empire State Realty vs. Groupe CRIT SA
Performance |
| Timeline |
| Empire State Realty |
| Groupe CRIT SA |
Empire State and Groupe CRIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Groupe CRIT
The main advantage of trading using opposite Empire State and Groupe CRIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Groupe CRIT 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 Groupe CRIT will offset losses from the drop in Groupe CRIT's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Groupe CRIT vs. Synergie SE | Groupe CRIT vs. Alten SA | Groupe CRIT vs. Manitou BF SA | Groupe CRIT vs. Linedata Services SA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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