Correlation Between Corporate Office and Beijing MediaLimited
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Beijing MediaLimited 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 Beijing MediaLimited 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 Beijing Media, you can compare the effects of market volatilities on Corporate Office and Beijing MediaLimited 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 Beijing MediaLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Beijing MediaLimited.
Diversification Opportunities for Corporate Office and Beijing MediaLimited
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Corporate and Beijing is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Beijing Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing MediaLimited 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 Beijing MediaLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing MediaLimited has no effect on the direction of Corporate Office i.e., Corporate Office and Beijing MediaLimited go up and down completely randomly.
Pair Corralation between Corporate Office and Beijing MediaLimited
Assuming the 90 days horizon Corporate Office Properties is expected to generate 0.26 times more return on investment than Beijing MediaLimited. However, Corporate Office Properties is 3.89 times less risky than Beijing MediaLimited. It trades about 0.05 of its potential returns per unit of risk. Beijing Media is currently generating about 0.01 per unit of risk. If you would invest 2,169 in Corporate Office Properties on September 2, 2024 and sell it today you would earn a total of 911.00 from holding Corporate Office Properties or generate 42.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. Beijing Media
Performance |
| Timeline |
| Corporate Office Pro |
| Beijing MediaLimited |
Corporate Office and Beijing MediaLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Beijing MediaLimited
The main advantage of trading using opposite Corporate Office and Beijing MediaLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Beijing MediaLimited 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 Beijing MediaLimited will offset losses from the drop in Beijing MediaLimited's long position.| Corporate Office vs. Compagnie Plastic Omnium | Corporate Office vs. Chiba Bank | Corporate Office vs. EAGLE MATERIALS | Corporate Office vs. The Hanover Insurance |
| Beijing MediaLimited vs. Haverty Furniture Companies | Beijing MediaLimited vs. MI Homes | Beijing MediaLimited vs. Addus HomeCare | Beijing MediaLimited vs. MHP Hotel AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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