Correlation Between WFD Unibail and Klépierre
Can any of the company-specific risk be diversified away by investing in both WFD Unibail 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 WFD Unibail and Klépierre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WFD Unibail Rodamco and Klpierre SA, you can compare the effects of market volatilities on WFD Unibail 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 WFD Unibail with a short position of Klépierre. Check out your portfolio center. Please also check ongoing floating volatility patterns of WFD Unibail and Klépierre.
Diversification Opportunities for WFD Unibail and Klépierre
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WFD and Klépierre is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding WFD Unibail Rodamco and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA and WFD Unibail 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 WFD Unibail Rodamco 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 WFD Unibail i.e., WFD Unibail and Klépierre go up and down completely randomly.
Pair Corralation between WFD Unibail and Klépierre
Assuming the 90 days horizon WFD Unibail is expected to generate 1.93 times less return on investment than Klépierre. But when comparing it to its historical volatility, WFD Unibail Rodamco is 1.39 times less risky than Klépierre. It trades about 0.04 of its potential returns per unit of risk. Klpierre SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,381 in Klpierre SA on August 28, 2024 and sell it today you would earn a total of 645.00 from holding Klpierre SA or generate 27.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.65% |
| Values | Daily Returns |
WFD Unibail Rodamco vs. Klpierre SA
Performance |
| Timeline |
| WFD Unibail Rodamco |
| Klpierre SA |
WFD Unibail and Klépierre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WFD Unibail and Klépierre
The main advantage of trading using opposite WFD Unibail and Klépierre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WFD Unibail 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.| WFD Unibail vs. Slate Grocery REIT | WFD Unibail vs. Seritage Growth Properties | WFD Unibail vs. Smart REIT | WFD Unibail vs. Riocan REIT |
| Klépierre vs. Smart REIT | Klépierre vs. Riocan REIT | Klépierre vs. Plaza Retail REIT | Klépierre vs. Choice Properties Real |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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