Correlation Between Transport International and Alstria Office
Can any of the company-specific risk be diversified away by investing in both Transport International and Alstria 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 Transport International and Alstria Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and alstria office REIT AG, you can compare the effects of market volatilities on Transport International and Alstria 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 Transport International with a short position of Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Alstria Office.
Diversification Opportunities for Transport International and Alstria Office
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transport and Alstria is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT and Transport International 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 Transport International Holdings are associated (or correlated) with Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Transport International i.e., Transport International and Alstria Office go up and down completely randomly.
Pair Corralation between Transport International and Alstria Office
Assuming the 90 days horizon Transport International is expected to generate 6.9 times less return on investment than Alstria Office. In addition to that, Transport International is 1.1 times more volatile than alstria office REIT AG. It trades about 0.04 of its total potential returns per unit of risk. alstria office REIT AG is currently generating about 0.27 per unit of volatility. If you would invest 570.00 in alstria office REIT AG on September 25, 2024 and sell it today you would earn a total of 190.00 from holding alstria office REIT AG or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. alstria office REIT AG
Performance |
| Timeline |
| Transport International |
| alstria office REIT |
Transport International and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Alstria Office
The main advantage of trading using opposite Transport International and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International position performs unexpectedly, Alstria 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| Transport International vs. Union Pacific | Transport International vs. Canadian National Railway | Transport International vs. MTR Limited | Transport International vs. CRRC Limited |
| Alstria Office vs. Materialise NV | Alstria Office vs. SANOK RUBBER ZY | Alstria Office vs. Sumitomo Rubber Industries | Alstria Office vs. Clean Energy Fuels |
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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