Correlation Between Independence Realty and Tefron
Can any of the company-specific risk be diversified away by investing in both Independence Realty and Tefron 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 Independence Realty and Tefron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independence Realty Trust and Tefron, you can compare the effects of market volatilities on Independence Realty and Tefron 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 Independence Realty with a short position of Tefron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Realty and Tefron.
Diversification Opportunities for Independence Realty and Tefron
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Independence and Tefron is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Independence Realty Trust and Tefron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tefron and Independence Realty 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 Independence Realty Trust are associated (or correlated) with Tefron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tefron has no effect on the direction of Independence Realty i.e., Independence Realty and Tefron go up and down completely randomly.
Pair Corralation between Independence Realty and Tefron
Considering the 90-day investment horizon Independence Realty Trust is expected to generate 0.39 times more return on investment than Tefron. However, Independence Realty Trust is 2.53 times less risky than Tefron. It trades about 0.04 of its potential returns per unit of risk. Tefron is currently generating about -0.15 per unit of risk. If you would invest 1,608 in Independence Realty Trust on August 25, 2024 and sell it today you would earn a total of 567.00 from holding Independence Realty Trust or generate 35.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 9.26% |
| Values | Daily Returns |
Independence Realty Trust vs. Tefron
Performance |
| Timeline |
| Independence Realty Trust |
| Tefron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Independence Realty and Tefron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independence Realty and Tefron
The main advantage of trading using opposite Independence Realty and Tefron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence Realty position performs unexpectedly, Tefron 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 Tefron will offset losses from the drop in Tefron's long position.| Independence Realty vs. Apartment Investment and | Independence Realty vs. Clipper Realty | Independence Realty vs. BRT Realty Trust | Independence Realty vs. UDR Inc |
| Tefron vs. Stepstone Group | Tefron vs. Independence Realty Trust | Tefron vs. Papaya Growth Opportunity | Tefron vs. Kite Realty Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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