Correlation Between Corporate Office and Kaufman Broad
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Kaufman Broad 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 Kaufman Broad 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 Kaufman Broad SA, you can compare the effects of market volatilities on Corporate Office and Kaufman Broad 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 Kaufman Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Kaufman Broad.
Diversification Opportunities for Corporate Office and Kaufman Broad
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Corporate and Kaufman is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad 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 Kaufman Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of Corporate Office i.e., Corporate Office and Kaufman Broad go up and down completely randomly.
Pair Corralation between Corporate Office and Kaufman Broad
Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the Kaufman Broad. But the stock apears to be less risky and, when comparing its historical volatility, Corporate Office Properties is 1.52 times less risky than Kaufman Broad. The stock trades about -0.16 of its potential returns per unit of risk. The Kaufman Broad SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,175 in Kaufman Broad SA on September 24, 2024 and sell it today you would earn a total of 25.00 from holding Kaufman Broad SA or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. Kaufman Broad SA
Performance |
| Timeline |
| Corporate Office Pro |
| Kaufman Broad SA |
Corporate Office and Kaufman Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Kaufman Broad
The main advantage of trading using opposite Corporate Office and Kaufman Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Kaufman Broad 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 Kaufman Broad will offset losses from the drop in Kaufman Broad's long position.| Corporate Office vs. Digital Realty Trust | Corporate Office vs. Gecina SA | Corporate Office vs. Japan Real Estate | Corporate Office vs. SL Green Realty |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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