Correlation Between Empire State and IFAN Financial
Can any of the company-specific risk be diversified away by investing in both Empire State and IFAN Financial 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 IFAN Financial 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 IFAN Financial, you can compare the effects of market volatilities on Empire State and IFAN Financial 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 IFAN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and IFAN Financial.
Diversification Opportunities for Empire State and IFAN Financial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and IFAN is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and IFAN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IFAN Financial 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 IFAN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IFAN Financial has no effect on the direction of Empire State i.e., Empire State and IFAN Financial go up and down completely randomly.
Pair Corralation between Empire State and IFAN Financial
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the IFAN Financial. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 29.43 times less risky than IFAN Financial. The stock trades about -0.31 of its potential returns per unit of risk. The IFAN Financial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.01 in IFAN Financial on November 27, 2024 and sell it today you would earn a total of 0.00 from holding IFAN Financial or generate 0.0% 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. IFAN Financial
Performance |
| Timeline |
| Empire State Realty |
| IFAN Financial |
Empire State and IFAN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and IFAN Financial
The main advantage of trading using opposite Empire State and IFAN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, IFAN Financial 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 IFAN Financial will offset losses from the drop in IFAN Financial's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| IFAN Financial vs. First Colombia Gold | IFAN Financial vs. Eline Entertainment Group | IFAN Financial vs. All American Gld | IFAN Financial vs. Green Leaf Innovations |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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