Correlation Between Empire State and RepliCel Life
Can any of the company-specific risk be diversified away by investing in both Empire State and RepliCel Life 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 RepliCel Life 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 RepliCel Life Sciences, you can compare the effects of market volatilities on Empire State and RepliCel Life 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 RepliCel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and RepliCel Life.
Diversification Opportunities for Empire State and RepliCel Life
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Empire and RepliCel is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and RepliCel Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RepliCel Life Sciences 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 RepliCel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RepliCel Life Sciences has no effect on the direction of Empire State i.e., Empire State and RepliCel Life go up and down completely randomly.
Pair Corralation between Empire State and RepliCel Life
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.17 times more return on investment than RepliCel Life. However, Empire State Realty is 6.01 times less risky than RepliCel Life. It trades about 0.08 of its potential returns per unit of risk. RepliCel Life Sciences is currently generating about -0.02 per unit of risk. If you would invest 686.00 in Empire State Realty on September 2, 2024 and sell it today you would earn a total of 410.00 from holding Empire State Realty or generate 59.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. RepliCel Life Sciences
Performance |
| Timeline |
| Empire State Realty |
| RepliCel Life Sciences |
Empire State and RepliCel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and RepliCel Life
The main advantage of trading using opposite Empire State and RepliCel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, RepliCel Life 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 RepliCel Life will offset losses from the drop in RepliCel Life's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| RepliCel Life vs. Sirona Biochem Corp | RepliCel Life vs. Quest PharmaTech | RepliCel Life vs. biOasis Technologies | RepliCel Life vs. RepliCel Life Sciences |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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