Correlation Between Tuxis and PEAK Old
Can any of the company-specific risk be diversified away by investing in both Tuxis and PEAK Old 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 Tuxis and PEAK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuxis and PEAK Old, you can compare the effects of market volatilities on Tuxis and PEAK Old 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 Tuxis with a short position of PEAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuxis and PEAK Old.
Diversification Opportunities for Tuxis and PEAK Old
Very good diversification
The 3 months correlation between Tuxis and PEAK is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Tuxis and PEAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEAK Old and Tuxis 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 Tuxis are associated (or correlated) with PEAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEAK Old has no effect on the direction of Tuxis i.e., Tuxis and PEAK Old go up and down completely randomly.
Pair Corralation between Tuxis and PEAK Old
Given the investment horizon of 90 days Tuxis is expected to under-perform the PEAK Old. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tuxis is 1.08 times less risky than PEAK Old. The pink sheet trades about -0.12 of its potential returns per unit of risk. The PEAK Old is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,472 in PEAK Old on August 28, 2024 and sell it today you would lose (260.00) from holding PEAK Old or give up 10.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.61% |
| Values | Daily Returns |
Tuxis vs. PEAK Old
Performance |
| Timeline |
| Tuxis |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PEAK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tuxis and PEAK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuxis and PEAK Old
The main advantage of trading using opposite Tuxis and PEAK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuxis position performs unexpectedly, PEAK Old 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 PEAK Old will offset losses from the drop in PEAK Old's long position.The idea behind Tuxis and PEAK Old pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PEAK Old vs. Welltower | PEAK Old vs. Mid America Apartment Communities | PEAK Old vs. Regency Centers | PEAK Old vs. UDR Inc |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |