Correlation Between Empire State and Groupe Partouche
Can any of the company-specific risk be diversified away by investing in both Empire State and Groupe Partouche 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 Groupe Partouche 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 Groupe Partouche SA, you can compare the effects of market volatilities on Empire State and Groupe Partouche 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 Groupe Partouche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Groupe Partouche.
Diversification Opportunities for Empire State and Groupe Partouche
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Empire and Groupe is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche 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 Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of Empire State i.e., Empire State and Groupe Partouche go up and down completely randomly.
Pair Corralation between Empire State and Groupe Partouche
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Groupe Partouche. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 1.16 times less risky than Groupe Partouche. The stock trades about -0.31 of its potential returns per unit of risk. The Groupe Partouche SA is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 1,975 in Groupe Partouche SA on November 27, 2024 and sell it today you would lose (185.00) from holding Groupe Partouche SA or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Empire State Realty vs. Groupe Partouche SA
Performance |
| Timeline |
| Empire State Realty |
| Groupe Partouche |
Empire State and Groupe Partouche Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Groupe Partouche
The main advantage of trading using opposite Empire State and Groupe Partouche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Groupe Partouche 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 Groupe Partouche will offset losses from the drop in Groupe Partouche's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Groupe Partouche vs. Passat Socit Anonyme | Groupe Partouche vs. Plastiques du Val | Groupe Partouche vs. NRJ Group | Groupe Partouche vs. Haulotte Group SA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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