Correlation Between Immofinanz and NEW WORLD
Can any of the company-specific risk be diversified away by investing in both Immofinanz and NEW WORLD 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 Immofinanz and NEW WORLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immofinanz AG and NEW WORLD DEVCO, you can compare the effects of market volatilities on Immofinanz and NEW WORLD 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 Immofinanz with a short position of NEW WORLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immofinanz and NEW WORLD.
Diversification Opportunities for Immofinanz and NEW WORLD
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Immofinanz and NEW is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Immofinanz AG and NEW WORLD DEVCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW WORLD DEVCO and Immofinanz 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 Immofinanz AG are associated (or correlated) with NEW WORLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW WORLD DEVCO has no effect on the direction of Immofinanz i.e., Immofinanz and NEW WORLD go up and down completely randomly.
Pair Corralation between Immofinanz and NEW WORLD
Assuming the 90 days trading horizon Immofinanz AG is expected to generate 0.82 times more return on investment than NEW WORLD. However, Immofinanz AG is 1.21 times less risky than NEW WORLD. It trades about -0.08 of its potential returns per unit of risk. NEW WORLD DEVCO is currently generating about -0.07 per unit of risk. If you would invest 2,380 in Immofinanz AG on October 13, 2024 and sell it today you would lose (812.00) from holding Immofinanz AG or give up 34.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Immofinanz AG vs. NEW WORLD DEVCO
Performance |
| Timeline |
| Immofinanz AG |
| NEW WORLD DEVCO |
Immofinanz and NEW WORLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immofinanz and NEW WORLD
The main advantage of trading using opposite Immofinanz and NEW WORLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immofinanz position performs unexpectedly, NEW WORLD 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 NEW WORLD will offset losses from the drop in NEW WORLD's long position.| Immofinanz vs. TELECOM ITALIA | Immofinanz vs. Highlight Communications AG | Immofinanz vs. COMBA TELECOM SYST | Immofinanz vs. NXP Semiconductors NV |
| NEW WORLD vs. AAC TECHNOLOGHLDGADR | NEW WORLD vs. Minerals Technologies | NEW WORLD vs. Digilife Technologies Limited | NEW WORLD vs. The Japan Steel |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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