Correlation Between Empire State and Jiangsu Expressway
Can any of the company-specific risk be diversified away by investing in both Empire State and Jiangsu Expressway 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 Jiangsu Expressway 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 Jiangsu Expressway, you can compare the effects of market volatilities on Empire State and Jiangsu Expressway 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 Jiangsu Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Jiangsu Expressway.
Diversification Opportunities for Empire State and Jiangsu Expressway
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Empire and Jiangsu is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Jiangsu Expressway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Expressway 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 Jiangsu Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Expressway has no effect on the direction of Empire State i.e., Empire State and Jiangsu Expressway go up and down completely randomly.
Pair Corralation between Empire State and Jiangsu Expressway
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.54 times more return on investment than Jiangsu Expressway. However, Empire State Realty is 1.87 times less risky than Jiangsu Expressway. It trades about 0.09 of its potential returns per unit of risk. Jiangsu Expressway is currently generating about -0.02 per unit of risk. If you would invest 945.00 in Empire State Realty on September 1, 2024 and sell it today you would earn a total of 151.00 from holding Empire State Realty or generate 15.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Jiangsu Expressway
Performance |
| Timeline |
| Empire State Realty |
| Jiangsu Expressway |
Empire State and Jiangsu Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Jiangsu Expressway
The main advantage of trading using opposite Empire State and Jiangsu Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Jiangsu Expressway 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 Jiangsu Expressway will offset losses from the drop in Jiangsu Expressway's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Jiangsu Expressway vs. Xunlei Ltd Adr | Jiangsu Expressway vs. Summit Materials | Jiangsu Expressway vs. Deluxe | Jiangsu Expressway vs. Marchex |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |