Correlation Between Corporate Office and PENINSULA ENERG
Can any of the company-specific risk be diversified away by investing in both Corporate Office and PENINSULA ENERG 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 PENINSULA ENERG 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 PENINSULA ENERG, you can compare the effects of market volatilities on Corporate Office and PENINSULA ENERG 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 PENINSULA ENERG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and PENINSULA ENERG.
Diversification Opportunities for Corporate Office and PENINSULA ENERG
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Corporate and PENINSULA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and PENINSULA ENERG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENINSULA ENERG 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 PENINSULA ENERG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENINSULA ENERG has no effect on the direction of Corporate Office i.e., Corporate Office and PENINSULA ENERG go up and down completely randomly.
Pair Corralation between Corporate Office and PENINSULA ENERG
Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the PENINSULA ENERG. But the stock apears to be less risky and, when comparing its historical volatility, Corporate Office Properties is 4.54 times less risky than PENINSULA ENERG. The stock trades about -0.16 of its potential returns per unit of risk. The PENINSULA ENERG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 72.00 in PENINSULA ENERG on September 25, 2024 and sell it today you would lose (1.00) from holding PENINSULA ENERG or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. PENINSULA ENERG
Performance |
| Timeline |
| Corporate Office Pro |
| PENINSULA ENERG |
Corporate Office and PENINSULA ENERG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and PENINSULA ENERG
The main advantage of trading using opposite Corporate Office and PENINSULA ENERG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, PENINSULA ENERG 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 PENINSULA ENERG will offset losses from the drop in PENINSULA ENERG's long position.The idea behind Corporate Office Properties and PENINSULA ENERG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Apple Inc | PENINSULA ENERG vs. Microsoft | PENINSULA ENERG vs. Microsoft |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |