Correlation Between Empire State and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both Empire State and Gran Tierra 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 Gran Tierra 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 Gran Tierra Energy, you can compare the effects of market volatilities on Empire State and Gran Tierra 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 Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Gran Tierra.
Diversification Opportunities for Empire State and Gran Tierra
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Empire and Gran is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy 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 Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of Empire State i.e., Empire State and Gran Tierra go up and down completely randomly.
Pair Corralation between Empire State and Gran Tierra
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.48 times more return on investment than Gran Tierra. However, Empire State Realty is 2.1 times less risky than Gran Tierra. It trades about -0.28 of its potential returns per unit of risk. Gran Tierra Energy is currently generating about -0.31 per unit of risk. If you would invest 958.00 in Empire State Realty on November 28, 2024 and sell it today you would lose (90.00) from holding Empire State Realty or give up 9.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Gran Tierra Energy
Performance |
| Timeline |
| Empire State Realty |
| Gran Tierra Energy |
Empire State and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Gran Tierra
The main advantage of trading using opposite Empire State and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Gran Tierra vs. NuVista Energy | Gran Tierra vs. Surge Energy | Gran Tierra vs. Birchcliff Energy | Gran Tierra vs. Kelt Exploration |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |