Correlation Between HomeToGo and Corporate Office
Can any of the company-specific risk be diversified away by investing in both HomeToGo and Corporate Office 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 HomeToGo and Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and Corporate Office Properties, you can compare the effects of market volatilities on HomeToGo and Corporate Office 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 HomeToGo with a short position of Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Corporate Office.
Diversification Opportunities for HomeToGo and Corporate Office
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HomeToGo and Corporate is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro and HomeToGo 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 HomeToGo SE are associated (or correlated) with Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of HomeToGo i.e., HomeToGo and Corporate Office go up and down completely randomly.
Pair Corralation between HomeToGo and Corporate Office
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the Corporate Office. In addition to that, HomeToGo is 1.82 times more volatile than Corporate Office Properties. It trades about -0.13 of its total potential returns per unit of risk. Corporate Office Properties is currently generating about 0.07 per unit of volatility. If you would invest 2,980 in Corporate Office Properties on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Corporate Office Properties or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. Corporate Office Properties
Performance |
| Timeline |
| HomeToGo SE |
| Corporate Office Pro |
HomeToGo and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and Corporate Office
The main advantage of trading using opposite HomeToGo and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| HomeToGo vs. Ryanair Holdings plc | HomeToGo vs. SYSTEMAIR AB | HomeToGo vs. Harmony Gold Mining | HomeToGo vs. Westinghouse Air Brake |
| Corporate Office vs. Superior Plus Corp | Corporate Office vs. NMI Holdings | Corporate Office vs. Origin Agritech | Corporate Office vs. SIVERS SEMICONDUCTORS AB |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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