Correlation Between Western Union and Crombie Real
Can any of the company-specific risk be diversified away by investing in both Western Union and Crombie Real 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 Western Union and Crombie Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Crombie Real Estate, you can compare the effects of market volatilities on Western Union and Crombie Real 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 Western Union with a short position of Crombie Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Crombie Real.
Diversification Opportunities for Western Union and Crombie Real
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Crombie is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Crombie Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crombie Real Estate and Western Union 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 Western Union Co are associated (or correlated) with Crombie Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crombie Real Estate has no effect on the direction of Western Union i.e., Western Union and Crombie Real go up and down completely randomly.
Pair Corralation between Western Union and Crombie Real
Allowing for the 90-day total investment horizon Western Union Co is expected to generate 0.71 times more return on investment than Crombie Real. However, Western Union Co is 1.4 times less risky than Crombie Real. It trades about 0.1 of its potential returns per unit of risk. Crombie Real Estate is currently generating about -0.27 per unit of risk. If you would invest 1,080 in Western Union Co on August 31, 2024 and sell it today you would earn a total of 22.00 from holding Western Union Co or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Western Union Co vs. Crombie Real Estate
Performance |
| Timeline |
| Western Union |
| Crombie Real Estate |
Western Union and Crombie Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Crombie Real
The main advantage of trading using opposite Western Union and Crombie Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Crombie Real 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 Crombie Real will offset losses from the drop in Crombie Real's long position.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| Crombie Real vs. Boston Properties | Crombie Real vs. Kilroy Realty Corp | Crombie Real vs. SL Green Realty | Crombie Real vs. Vornado Realty Trust |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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