Correlation Between Exemplar REITail and We Buy
Can any of the company-specific risk be diversified away by investing in both Exemplar REITail and We Buy 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 Exemplar REITail and We Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exemplar REITail and We Buy Cars, you can compare the effects of market volatilities on Exemplar REITail and We Buy 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 Exemplar REITail with a short position of We Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exemplar REITail and We Buy.
Diversification Opportunities for Exemplar REITail and We Buy
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Exemplar and WBC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Exemplar REITail and We Buy Cars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on We Buy Cars and Exemplar REITail 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 Exemplar REITail are associated (or correlated) with We Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of We Buy Cars has no effect on the direction of Exemplar REITail i.e., Exemplar REITail and We Buy go up and down completely randomly.
Pair Corralation between Exemplar REITail and We Buy
Assuming the 90 days trading horizon Exemplar REITail is expected to generate 128.38 times more return on investment than We Buy. However, Exemplar REITail is 128.38 times more volatile than We Buy Cars. It trades about 0.19 of its potential returns per unit of risk. We Buy Cars is currently generating about 0.63 per unit of risk. If you would invest 107,975 in Exemplar REITail on August 28, 2024 and sell it today you would earn a total of 2,025 from holding Exemplar REITail or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Exemplar REITail vs. We Buy Cars
Performance |
| Timeline |
| Exemplar REITail |
| We Buy Cars |
Exemplar REITail and We Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exemplar REITail and We Buy
The main advantage of trading using opposite Exemplar REITail and We Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exemplar REITail position performs unexpectedly, We Buy 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 We Buy will offset losses from the drop in We Buy's long position.| Exemplar REITail vs. CA Sales Holdings | Exemplar REITail vs. Frontier Transport Holdings | Exemplar REITail vs. Afine Investments | Exemplar REITail vs. eMedia Holdings Limited |
| We Buy vs. eMedia Holdings Limited | We Buy vs. Deneb Investments | We Buy vs. Hosken Consolidated Investments | We Buy vs. Astoria Investments |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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