Correlation Between Post and Real Estate
Can any of the company-specific risk be diversified away by investing in both Post and Real Estate 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 Post and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and Real Estate 11, you can compare the effects of market volatilities on Post and Real Estate 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 Post with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and Real Estate.
Diversification Opportunities for Post and Real Estate
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Post and Real is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and Real Estate 11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate 11 and Post 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 Post and Telecommunications are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate 11 has no effect on the direction of Post i.e., Post and Real Estate go up and down completely randomly.
Pair Corralation between Post and Real Estate
Assuming the 90 days trading horizon Post and Telecommunications is expected to generate 0.95 times more return on investment than Real Estate. However, Post and Telecommunications is 1.05 times less risky than Real Estate. It trades about -0.04 of its potential returns per unit of risk. Real Estate 11 is currently generating about -0.04 per unit of risk. If you would invest 597,000 in Post and Telecommunications on September 3, 2024 and sell it today you would lose (129,000) from holding Post and Telecommunications or give up 21.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 75.11% |
| Values | Daily Returns |
Post and Telecommunications vs. Real Estate 11
Performance |
| Timeline |
| Post and Telecommuni |
| Real Estate 11 |
Post and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post and Real Estate
The main advantage of trading using opposite Post and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Post vs. Hanoi Plastics JSC | Post vs. Phuoc Hoa Rubber | Post vs. Transport and Industry | Post vs. Hochiminh City Metal |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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