Correlation Between Workspace Group and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Workspace Group and Plaza Centers 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 Workspace Group and Plaza Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workspace Group PLC and Plaza Centers NV, you can compare the effects of market volatilities on Workspace Group and Plaza Centers 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 Workspace Group with a short position of Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workspace Group and Plaza Centers.
Diversification Opportunities for Workspace Group and Plaza Centers
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Workspace and Plaza is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Workspace Group PLC and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV and Workspace Group 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 Workspace Group PLC are associated (or correlated) with Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Workspace Group i.e., Workspace Group and Plaza Centers go up and down completely randomly.
Pair Corralation between Workspace Group and Plaza Centers
Assuming the 90 days trading horizon Workspace Group PLC is expected to generate 0.54 times more return on investment than Plaza Centers. However, Workspace Group PLC is 1.86 times less risky than Plaza Centers. It trades about 0.01 of its potential returns per unit of risk. Plaza Centers NV is currently generating about -0.03 per unit of risk. If you would invest 45,146 in Workspace Group PLC on October 13, 2024 and sell it today you would lose (96.00) from holding Workspace Group PLC or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Workspace Group PLC vs. Plaza Centers NV
Performance |
| Timeline |
| Workspace Group PLC |
| Plaza Centers NV |
Workspace Group and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Workspace Group and Plaza Centers
The main advantage of trading using opposite Workspace Group and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workspace Group position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| Workspace Group vs. Trainline Plc | Workspace Group vs. Vitec Software Group | Workspace Group vs. Cognizant Technology Solutions | Workspace Group vs. EVS Broadcast Equipment |
| Plaza Centers vs. Air Products Chemicals | Plaza Centers vs. Livermore Investments Group | Plaza Centers vs. Beowulf Mining | Plaza Centers vs. Lundin Mining Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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