Correlation Between Empire State and Mainstay California
Can any of the company-specific risk be diversified away by investing in both Empire State and Mainstay California 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 Mainstay California 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 Mainstay California Tax, you can compare the effects of market volatilities on Empire State and Mainstay California 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 Mainstay California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Mainstay California.
Diversification Opportunities for Empire State and Mainstay California
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Mainstay is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Mainstay California Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay California Tax 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 Mainstay California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay California Tax has no effect on the direction of Empire State i.e., Empire State and Mainstay California go up and down completely randomly.
Pair Corralation between Empire State and Mainstay California
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Mainstay California. In addition to that, Empire State is 7.35 times more volatile than Mainstay California Tax. It trades about -0.28 of its total potential returns per unit of risk. Mainstay California Tax is currently generating about 0.2 per unit of volatility. If you would invest 964.00 in Mainstay California Tax on November 28, 2024 and sell it today you would earn a total of 9.00 from holding Mainstay California Tax or generate 0.93% 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. Mainstay California Tax
Performance |
| Timeline |
| Empire State Realty |
| Mainstay California Tax |
Empire State and Mainstay California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Mainstay California
The main advantage of trading using opposite Empire State and Mainstay California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Mainstay California 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 Mainstay California will offset losses from the drop in Mainstay California's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Mainstay California vs. Calvert Moderate Allocation | Mainstay California vs. Enhanced Large Pany | Mainstay California vs. Guidemark Large Cap | Mainstay California vs. Knights Of Umbus |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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