Correlation Between Empire State and CSL
Can any of the company-specific risk be diversified away by investing in both Empire State and CSL 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 CSL 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 CSL Limited, you can compare the effects of market volatilities on Empire State and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and CSL.
Diversification Opportunities for Empire State and CSL
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Empire and CSL is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Empire State i.e., Empire State and CSL go up and down completely randomly.
Pair Corralation between Empire State and CSL
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.48 times more return on investment than CSL. However, Empire State Realty is 2.09 times less risky than CSL. It trades about 0.04 of its potential returns per unit of risk. CSL Limited is currently generating about -0.03 per unit of risk. If you would invest 1,108 in Empire State Realty on August 29, 2024 and sell it today you would earn a total of 17.00 from holding Empire State Realty or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Empire State Realty vs. CSL Limited
Performance |
| Timeline |
| Empire State Realty |
| CSL Limited |
Empire State and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and CSL
The main advantage of trading using opposite Empire State and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| CSL vs. Pmv Pharmaceuticals | CSL vs. Novo Nordisk AS | CSL vs. Kalvista Pharmaceuticals | CSL vs. ProKidney 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |