Correlation Between Empire State and Group Eleven
Can any of the company-specific risk be diversified away by investing in both Empire State and Group Eleven 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 Group Eleven 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 Group Eleven Resources, you can compare the effects of market volatilities on Empire State and Group Eleven 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 Group Eleven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Group Eleven.
Diversification Opportunities for Empire State and Group Eleven
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Empire and Group is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Group Eleven Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Eleven 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 Group Eleven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Eleven Resources has no effect on the direction of Empire State i.e., Empire State and Group Eleven go up and down completely randomly.
Pair Corralation between Empire State and Group Eleven
Given the investment horizon of 90 days Empire State is expected to generate 1.56 times less return on investment than Group Eleven. But when comparing it to its historical volatility, Empire State Realty is 5.83 times less risky than Group Eleven. It trades about 0.13 of its potential returns per unit of risk. Group Eleven Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Group Eleven Resources on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Group Eleven Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Empire State Realty vs. Group Eleven Resources
Performance |
| Timeline |
| Empire State Realty |
| Group Eleven Resources |
Empire State and Group Eleven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Group Eleven
The main advantage of trading using opposite Empire State and Group Eleven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Group Eleven 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 Group Eleven will offset losses from the drop in Group Eleven's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Group Eleven vs. Tinka Resources Limited | Group Eleven vs. Neo Battery Materials | Group Eleven vs. United States Antimony | Group Eleven vs. NioCorp Developments Ltd |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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