Correlation Between Choice Properties and Klépierre
Can any of the company-specific risk be diversified away by investing in both Choice Properties and Klépierre 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 Choice Properties and Klépierre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Properties Real and Klpierre SA, you can compare the effects of market volatilities on Choice Properties and Klépierre 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 Choice Properties with a short position of Klépierre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Properties and Klépierre.
Diversification Opportunities for Choice Properties and Klépierre
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choice and Klépierre is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Choice Properties Real and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA and Choice 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 Choice Properties Real are associated (or correlated) with Klépierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Choice Properties i.e., Choice Properties and Klépierre go up and down completely randomly.
Pair Corralation between Choice Properties and Klépierre
Assuming the 90 days horizon Choice Properties Real is expected to generate 0.94 times more return on investment than Klépierre. However, Choice Properties Real is 1.06 times less risky than Klépierre. It trades about -0.31 of its potential returns per unit of risk. Klpierre SA is currently generating about -0.33 per unit of risk. If you would invest 1,044 in Choice Properties Real on August 30, 2024 and sell it today you would lose (55.00) from holding Choice Properties Real or give up 5.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.96% |
| Values | Daily Returns |
Choice Properties Real vs. Klpierre SA
Performance |
| Timeline |
| Choice Properties Real |
| Klpierre SA |
Choice Properties and Klépierre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Properties and Klépierre
The main advantage of trading using opposite Choice Properties and Klépierre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Properties position performs unexpectedly, Klépierre 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 Klépierre will offset losses from the drop in Klépierre's long position.| Choice Properties vs. Boston Properties | Choice Properties vs. Kilroy Realty Corp | Choice Properties vs. SL Green Realty | Choice Properties vs. Vornado Realty Trust |
| Klépierre vs. Regency Centers | Klépierre vs. Getty Realty | Klépierre vs. Site Centers Corp | Klépierre vs. Brixmor Property |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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