Correlation Between Empire State and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both Empire State and Jeffs Brands 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 Jeffs Brands 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 Jeffs Brands, you can compare the effects of market volatilities on Empire State and Jeffs Brands 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 Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Jeffs Brands.
Diversification Opportunities for Empire State and Jeffs Brands
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Jeffs is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands 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 Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of Empire State i.e., Empire State and Jeffs Brands go up and down completely randomly.
Pair Corralation between Empire State and Jeffs Brands
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Jeffs Brands. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 11.23 times less risky than Jeffs Brands. The stock trades about -0.16 of its potential returns per unit of risk. The Jeffs Brands is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Jeffs Brands on November 28, 2024 and sell it today you would lose (0.43) from holding Jeffs Brands or give up 17.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Empire State Realty vs. Jeffs Brands
Performance |
| Timeline |
| Empire State Realty |
| Jeffs Brands |
Empire State and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Jeffs Brands
The main advantage of trading using opposite Empire State and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Jeffs Brands vs. Jeffs Brands | Jeffs Brands vs. Sharps Technology Warrant | Jeffs Brands vs. bioAffinity Technologies Warrant | Jeffs Brands vs. Nocera Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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