Correlation Between KENEDIX OFFICE and DEUTSCHE WOHNEN
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and DEUTSCHE WOHNEN 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 KENEDIX OFFICE and DEUTSCHE WOHNEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and DEUTSCHE WOHNEN ADRS12, you can compare the effects of market volatilities on KENEDIX OFFICE and DEUTSCHE WOHNEN 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 KENEDIX OFFICE with a short position of DEUTSCHE WOHNEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and DEUTSCHE WOHNEN.
Diversification Opportunities for KENEDIX OFFICE and DEUTSCHE WOHNEN
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KENEDIX and DEUTSCHE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and DEUTSCHE WOHNEN ADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE WOHNEN ADRS12 and KENEDIX OFFICE 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 KENEDIX OFFICE INV are associated (or correlated) with DEUTSCHE WOHNEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE WOHNEN ADRS12 has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and DEUTSCHE WOHNEN go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and DEUTSCHE WOHNEN
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to under-perform the DEUTSCHE WOHNEN. But the stock apears to be less risky and, when comparing its historical volatility, KENEDIX OFFICE INV is 2.03 times less risky than DEUTSCHE WOHNEN. The stock trades about -0.03 of its potential returns per unit of risk. The DEUTSCHE WOHNEN ADRS12 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 958.00 in DEUTSCHE WOHNEN ADRS12 on October 16, 2024 and sell it today you would earn a total of 72.00 from holding DEUTSCHE WOHNEN ADRS12 or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. DEUTSCHE WOHNEN ADRS12
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| DEUTSCHE WOHNEN ADRS12 |
KENEDIX OFFICE and DEUTSCHE WOHNEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and DEUTSCHE WOHNEN
The main advantage of trading using opposite KENEDIX OFFICE and DEUTSCHE WOHNEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN will offset losses from the drop in DEUTSCHE WOHNEN's long position.| KENEDIX OFFICE vs. APPLIED MATERIALS | KENEDIX OFFICE vs. THRACE PLASTICS | KENEDIX OFFICE vs. Applied Materials | KENEDIX OFFICE vs. Vulcan Materials |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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