Correlation Between Corporate Office and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Neinor Homes 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 Corporate Office and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and Neinor Homes SA, you can compare the effects of market volatilities on Corporate Office and Neinor Homes 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 Corporate Office with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Neinor Homes.
Diversification Opportunities for Corporate Office and Neinor Homes
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Corporate and Neinor is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA and Corporate Office 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 Corporate Office Properties are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of Corporate Office i.e., Corporate Office and Neinor Homes go up and down completely randomly.
Pair Corralation between Corporate Office and Neinor Homes
Assuming the 90 days horizon Corporate Office is expected to generate 2.44 times less return on investment than Neinor Homes. But when comparing it to its historical volatility, Corporate Office Properties is 1.27 times less risky than Neinor Homes. It trades about 0.05 of its potential returns per unit of risk. Neinor Homes SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 725.00 in Neinor Homes SA on August 25, 2024 and sell it today you would earn a total of 805.00 from holding Neinor Homes SA or generate 111.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Corporate Office Properties vs. Neinor Homes SA
Performance |
| Timeline |
| Corporate Office Pro |
| Neinor Homes SA |
Corporate Office and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Neinor Homes
The main advantage of trading using opposite Corporate Office and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| Corporate Office vs. CHINA EDUCATION GROUP | Corporate Office vs. SWISS WATER DECAFFCOFFEE | Corporate Office vs. Xinhua Winshare Publishing | Corporate Office vs. TAL Education Group |
| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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