Correlation Between Empire State and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Empire State and Strategic Asset 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 Strategic Asset 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 Strategic Asset Management, you can compare the effects of market volatilities on Empire State and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Strategic Asset.
Diversification Opportunities for Empire State and Strategic Asset
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Strategic is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Empire State i.e., Empire State and Strategic Asset go up and down completely randomly.
Pair Corralation between Empire State and Strategic Asset
Given the investment horizon of 90 days Empire State Realty is expected to generate 4.33 times more return on investment than Strategic Asset. However, Empire State is 4.33 times more volatile than Strategic Asset Management. It trades about 0.09 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.17 per unit of risk. If you would invest 1,082 in Empire State Realty on August 29, 2024 and sell it today you would earn a total of 26.00 from holding Empire State Realty or generate 2.4% 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. Strategic Asset Management
Performance |
| Timeline |
| Empire State Realty |
| Strategic Asset Mana |
Empire State and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Strategic Asset
The main advantage of trading using opposite Empire State and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Strategic Asset vs. American Funds Inflation | Strategic Asset vs. Fidelity Sai Inflationfocused | Strategic Asset vs. Lord Abbett Inflation | Strategic Asset vs. Goldman Sachs Inflation |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |