Correlation Between IBEX 35 and GMP Property
Can any of the company-specific risk be diversified away by investing in both IBEX 35 and GMP Property 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 IBEX 35 and GMP Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX 35 Index and GMP Property SOCIMI, you can compare the effects of market volatilities on IBEX 35 and GMP Property 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 IBEX 35 with a short position of GMP Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX 35 and GMP Property.
Diversification Opportunities for IBEX 35 and GMP Property
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IBEX and GMP is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding IBEX 35 Index and GMP Property SOCIMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMP Property SOCIMI and IBEX 35 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 IBEX 35 Index are associated (or correlated) with GMP Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMP Property SOCIMI has no effect on the direction of IBEX 35 i.e., IBEX 35 and GMP Property go up and down completely randomly.
Pair Corralation between IBEX 35 and GMP Property
Assuming the 90 days trading horizon IBEX 35 is expected to generate 1.7 times less return on investment than GMP Property. But when comparing it to its historical volatility, IBEX 35 Index is 4.09 times less risky than GMP Property. It trades about 0.06 of its potential returns per unit of risk. GMP Property SOCIMI is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,650 in GMP Property SOCIMI on August 27, 2024 and sell it today you would earn a total of 950.00 from holding GMP Property SOCIMI or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.92% |
| Values | Daily Returns |
IBEX 35 Index vs. GMP Property SOCIMI
Performance |
| Timeline |
IBEX 35 and GMP Property Volatility Contrast
Predicted Return Density |
| Returns |
IBEX 35 Index
Pair trading matchups for IBEX 35
GMP Property SOCIMI
Pair trading matchups for GMP Property
Pair Trading with IBEX 35 and GMP Property
The main advantage of trading using opposite IBEX 35 and GMP Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 35 position performs unexpectedly, GMP Property 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 GMP Property will offset losses from the drop in GMP Property's long position.| IBEX 35 vs. Hispanotels Inversiones SOCIMI | IBEX 35 vs. Energy Solar Tech | IBEX 35 vs. All Iron Re | IBEX 35 vs. Elaia Investment Spain |
| GMP Property vs. Inhome Prime Properties | GMP Property vs. International Consolidated Airlines | GMP Property vs. Ebro Foods | GMP Property vs. Home Capital Rentals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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