Correlation Between Empire State and Transurban
Can any of the company-specific risk be diversified away by investing in both Empire State and Transurban 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 Transurban 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 Transurban Group, you can compare the effects of market volatilities on Empire State and Transurban 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 Transurban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Transurban.
Diversification Opportunities for Empire State and Transurban
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and Transurban is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group 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 Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Empire State i.e., Empire State and Transurban go up and down completely randomly.
Pair Corralation between Empire State and Transurban
Given the investment horizon of 90 days Empire State is expected to generate 1.02 times less return on investment than Transurban. But when comparing it to its historical volatility, Empire State Realty is 2.0 times less risky than Transurban. It trades about 0.09 of its potential returns per unit of risk. Transurban Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 794.00 in Transurban Group on September 1, 2024 and sell it today you would earn a total of 92.00 from holding Transurban Group or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Empire State Realty vs. Transurban Group
Performance |
| Timeline |
| Empire State Realty |
| Transurban Group |
Empire State and Transurban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Transurban
The main advantage of trading using opposite Empire State and Transurban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Transurban 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 Transurban will offset losses from the drop in Transurban's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Transurban vs. BCE Inc | Transurban vs. Digi International | Transurban vs. Sphere Entertainment Co | Transurban vs. Anterix |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |