Correlation Between Merlin Properties and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both Merlin Properties and Neinor Homes 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 Merlin Properties and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Merlin Properties SOCIMI and Neinor Homes SLU, you can compare the effects of market volatilities on Merlin Properties and Neinor Homes 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 Merlin Properties with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Merlin Properties and Neinor Homes.
Diversification Opportunities for Merlin Properties and Neinor Homes
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Merlin and Neinor is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Merlin Properties SOCIMI and Neinor Homes SLU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SLU and Merlin Properties 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 Merlin Properties SOCIMI are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SLU has no effect on the direction of Merlin Properties i.e., Merlin Properties and Neinor Homes go up and down completely randomly.
Pair Corralation between Merlin Properties and Neinor Homes
Assuming the 90 days trading horizon Merlin Properties SOCIMI is expected to under-perform the Neinor Homes. In addition to that, Merlin Properties is 1.73 times more volatile than Neinor Homes SLU. It trades about -0.04 of its total potential returns per unit of risk. Neinor Homes SLU is currently generating about 0.01 per unit of volatility. If you would invest 1,508 in Neinor Homes SLU on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Neinor Homes SLU or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Merlin Properties SOCIMI vs. Neinor Homes SLU
Performance |
| Timeline |
| Merlin Properties SOCIMI |
| Neinor Homes SLU |
Merlin Properties and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Merlin Properties and Neinor Homes
The main advantage of trading using opposite Merlin Properties and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Merlin Properties position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| Merlin Properties vs. Energy Solar Tech | Merlin Properties vs. Borges Agricultural Industrial | Merlin Properties vs. Inhome Prime Properties | Merlin Properties vs. Aedas Homes SL |
| Neinor Homes vs. International Consolidated Airlines | Neinor Homes vs. Merlin Properties SOCIMI | Neinor Homes vs. Aena SA | Neinor Homes vs. Acerinox |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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