Correlation Between Corporate Office and Hongkong
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Hongkong 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 Hongkong 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 The Hongkong and, you can compare the effects of market volatilities on Corporate Office and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Hongkong.
Diversification Opportunities for Corporate Office and Hongkong
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Corporate and Hongkong is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of Corporate Office i.e., Corporate Office and Hongkong go up and down completely randomly.
Pair Corralation between Corporate Office and Hongkong
Assuming the 90 days horizon Corporate Office Properties is expected to generate 1.49 times more return on investment than Hongkong. However, Corporate Office is 1.49 times more volatile than The Hongkong and. It trades about -0.1 of its potential returns per unit of risk. The Hongkong and is currently generating about -0.2 per unit of risk. If you would invest 2,911 in Corporate Office Properties on October 29, 2024 and sell it today you would lose (91.00) from holding Corporate Office Properties or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. The Hongkong and
Performance |
| Timeline |
| Corporate Office Pro |
| The Hongkong |
Corporate Office and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Hongkong
The main advantage of trading using opposite Corporate Office and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong'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 |
| Hongkong vs. DICKS Sporting Goods | Hongkong vs. COLUMBIA SPORTSWEAR | Hongkong vs. G III Apparel Group | Hongkong vs. MAG SILVER |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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