Correlation Between Empire State and Optimum International
Can any of the company-specific risk be diversified away by investing in both Empire State and Optimum International 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 Optimum International 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 Optimum International Fund, you can compare the effects of market volatilities on Empire State and Optimum International 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 Optimum International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Optimum International.
Diversification Opportunities for Empire State and Optimum International
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Empire and Optimum is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Optimum International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum International 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 Optimum International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum International has no effect on the direction of Empire State i.e., Empire State and Optimum International go up and down completely randomly.
Pair Corralation between Empire State and Optimum International
Given the investment horizon of 90 days Empire State Realty is expected to generate 2.66 times more return on investment than Optimum International. However, Empire State is 2.66 times more volatile than Optimum International Fund. It trades about 0.06 of its potential returns per unit of risk. Optimum International Fund is currently generating about 0.06 per unit of risk. If you would invest 657.00 in Empire State Realty on August 30, 2024 and sell it today you would earn a total of 451.00 from holding Empire State Realty or generate 68.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Optimum International Fund
Performance |
| Timeline |
| Empire State Realty |
| Optimum International |
Empire State and Optimum International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Optimum International
The main advantage of trading using opposite Empire State and Optimum International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Optimum International 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 Optimum International will offset losses from the drop in Optimum International's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Optimum International vs. Msift High Yield | Optimum International vs. Pimco High Yield | Optimum International vs. Artisan High Income | Optimum International vs. Ppm High Yield |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |