Correlation Between Empire State and Duff
Can any of the company-specific risk be diversified away by investing in both Empire State and Duff 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 Duff 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 Duff And Phelps, you can compare the effects of market volatilities on Empire State and Duff 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 Duff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Duff.
Diversification Opportunities for Empire State and Duff
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Duff is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Duff And Phelps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duff And Phelps 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 Duff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duff And Phelps has no effect on the direction of Empire State i.e., Empire State and Duff go up and down completely randomly.
Pair Corralation between Empire State and Duff
Given the investment horizon of 90 days Empire State is expected to generate 1.79 times less return on investment than Duff. In addition to that, Empire State is 1.2 times more volatile than Duff And Phelps. It trades about 0.15 of its total potential returns per unit of risk. Duff And Phelps is currently generating about 0.31 per unit of volatility. If you would invest 1,150 in Duff And Phelps on August 29, 2024 and sell it today you would earn a total of 85.00 from holding Duff And Phelps or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Duff And Phelps
Performance |
| Timeline |
| Empire State Realty |
| Duff And Phelps |
Empire State and Duff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Duff
The main advantage of trading using opposite Empire State and Duff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Duff 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 Duff will offset losses from the drop in Duff's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Duff vs. Gabelli Global Small | Duff vs. MFS Investment Grade | Duff vs. Eaton Vance National | Duff vs. GAMCO Natural Resources |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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