Correlation Between HIAG Immobilien and Allreal Holding
Can any of the company-specific risk be diversified away by investing in both HIAG Immobilien and Allreal Holding 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 HIAG Immobilien and Allreal Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HIAG Immobilien Holding and Allreal Holding, you can compare the effects of market volatilities on HIAG Immobilien and Allreal Holding 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 HIAG Immobilien with a short position of Allreal Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of HIAG Immobilien and Allreal Holding.
Diversification Opportunities for HIAG Immobilien and Allreal Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HIAG and Allreal is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding HIAG Immobilien Holding and Allreal Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allreal Holding and HIAG Immobilien 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 HIAG Immobilien Holding are associated (or correlated) with Allreal Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allreal Holding has no effect on the direction of HIAG Immobilien i.e., HIAG Immobilien and Allreal Holding go up and down completely randomly.
Pair Corralation between HIAG Immobilien and Allreal Holding
Assuming the 90 days trading horizon HIAG Immobilien is expected to generate 1.04 times less return on investment than Allreal Holding. In addition to that, HIAG Immobilien is 1.23 times more volatile than Allreal Holding. It trades about 0.04 of its total potential returns per unit of risk. Allreal Holding is currently generating about 0.05 per unit of volatility. If you would invest 14,351 in Allreal Holding on December 12, 2024 and sell it today you would earn a total of 3,069 from holding Allreal Holding or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HIAG Immobilien Holding vs. Allreal Holding
Performance |
| Timeline |
| HIAG Immobilien Holding |
| Allreal Holding |
HIAG Immobilien and Allreal Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HIAG Immobilien and Allreal Holding
The main advantage of trading using opposite HIAG Immobilien and Allreal Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HIAG Immobilien position performs unexpectedly, Allreal Holding 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 Allreal Holding will offset losses from the drop in Allreal Holding's long position.| HIAG Immobilien vs. Allreal Holding | ||
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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.
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