Correlation Between Empire State and Greentown China
Can any of the company-specific risk be diversified away by investing in both Empire State and Greentown China 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 Greentown China 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 Greentown China Holdings, you can compare the effects of market volatilities on Empire State and Greentown China 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 Greentown China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Greentown China.
Diversification Opportunities for Empire State and Greentown China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Empire and Greentown is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Greentown China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greentown China Holdings 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 Greentown China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greentown China Holdings has no effect on the direction of Empire State i.e., Empire State and Greentown China go up and down completely randomly.
Pair Corralation between Empire State and Greentown China
If you would invest 1,060 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 36.00 from holding Empire State Realty or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Empire State Realty vs. Greentown China Holdings
Performance |
| Timeline |
| Empire State Realty |
| Greentown China Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Empire State and Greentown China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Greentown China
The main advantage of trading using opposite Empire State and Greentown China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Greentown China 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 Greentown China will offset losses from the drop in Greentown China's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Greentown China vs. Fomento Economico Mexicano | Greentown China vs. Monster Beverage Corp | Greentown China vs. Keurig Dr Pepper | Greentown China vs. Tencent Music Entertainment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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