Correlation Between Empire State and Keyarch Acquisition
Can any of the company-specific risk be diversified away by investing in both Empire State and Keyarch Acquisition 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 Keyarch Acquisition 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 Keyarch Acquisition, you can compare the effects of market volatilities on Empire State and Keyarch Acquisition 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 Keyarch Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Keyarch Acquisition.
Diversification Opportunities for Empire State and Keyarch Acquisition
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Empire and Keyarch is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Keyarch Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyarch Acquisition 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 Keyarch Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyarch Acquisition has no effect on the direction of Empire State i.e., Empire State and Keyarch Acquisition go up and down completely randomly.
Pair Corralation between Empire State and Keyarch Acquisition
Given the investment horizon of 90 days Empire State is expected to generate 2.8 times less return on investment than Keyarch Acquisition. But when comparing it to its historical volatility, Empire State Realty is 1.31 times less risky than Keyarch Acquisition. It trades about 0.08 of its potential returns per unit of risk. Keyarch Acquisition is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,047 in Keyarch Acquisition on September 2, 2024 and sell it today you would earn a total of 107.00 from holding Keyarch Acquisition or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 6.99% |
| Values | Daily Returns |
Empire State Realty vs. Keyarch Acquisition
Performance |
| Timeline |
| Empire State Realty |
| Keyarch Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Empire State and Keyarch Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Keyarch Acquisition
The main advantage of trading using opposite Empire State and Keyarch Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Keyarch Acquisition 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 Keyarch Acquisition will offset losses from the drop in Keyarch Acquisition's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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