Correlation Between Empire State and Overseas Chinese
Can any of the company-specific risk be diversified away by investing in both Empire State and Overseas Chinese 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 Overseas Chinese 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 Overseas Chinese Banking, you can compare the effects of market volatilities on Empire State and Overseas Chinese 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 Overseas Chinese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Overseas Chinese.
Diversification Opportunities for Empire State and Overseas Chinese
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Empire and Overseas is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Overseas Chinese Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overseas Chinese Banking 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 Overseas Chinese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overseas Chinese Banking has no effect on the direction of Empire State i.e., Empire State and Overseas Chinese go up and down completely randomly.
Pair Corralation between Empire State and Overseas Chinese
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Overseas Chinese. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 1.16 times less risky than Overseas Chinese. The stock trades about -0.02 of its potential returns per unit of risk. The Overseas Chinese Banking is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,091 in Overseas Chinese Banking on November 28, 2024 and sell it today you would earn a total of 520.00 from holding Overseas Chinese Banking or generate 24.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Overseas Chinese Banking
Performance |
| Timeline |
| Empire State Realty |
| Overseas Chinese Banking |
Empire State and Overseas Chinese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Overseas Chinese
The main advantage of trading using opposite Empire State and Overseas Chinese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Overseas Chinese 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 Overseas Chinese will offset losses from the drop in Overseas Chinese's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Overseas Chinese vs. Swedbank AB | Overseas Chinese vs. KBC Groep NV | Overseas Chinese vs. Nordea Bank Abp | Overseas Chinese vs. DBS Group Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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