Correlation Between Swire Properties and COSTAR GROUP
Can any of the company-specific risk be diversified away by investing in both Swire Properties and COSTAR GROUP 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 Swire Properties and COSTAR GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Properties Limited and COSTAR GROUP INC, you can compare the effects of market volatilities on Swire Properties and COSTAR GROUP 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 Swire Properties with a short position of COSTAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Properties and COSTAR GROUP.
Diversification Opportunities for Swire Properties and COSTAR GROUP
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Swire and COSTAR is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Swire Properties Limited and COSTAR GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTAR GROUP INC and Swire 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 Swire Properties Limited are associated (or correlated) with COSTAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTAR GROUP INC has no effect on the direction of Swire Properties i.e., Swire Properties and COSTAR GROUP go up and down completely randomly.
Pair Corralation between Swire Properties and COSTAR GROUP
Assuming the 90 days horizon Swire Properties Limited is expected to under-perform the COSTAR GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Swire Properties Limited is 1.48 times less risky than COSTAR GROUP. The stock trades about -0.07 of its potential returns per unit of risk. The COSTAR GROUP INC is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6,831 in COSTAR GROUP INC on August 29, 2024 and sell it today you would earn a total of 783.00 from holding COSTAR GROUP INC or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swire Properties Limited vs. COSTAR GROUP INC
Performance |
| Timeline |
| Swire Properties |
| COSTAR GROUP INC |
Swire Properties and COSTAR GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Properties and COSTAR GROUP
The main advantage of trading using opposite Swire Properties and COSTAR GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Properties position performs unexpectedly, COSTAR GROUP 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 COSTAR GROUP will offset losses from the drop in COSTAR GROUP's long position.| Swire Properties vs. CVS Health | Swire Properties vs. Southwest Airlines Co | Swire Properties vs. Bausch Health Companies | Swire Properties vs. JAPAN AIRLINES |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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