Correlation Between Corporate Office and Tanger Factory
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Tanger Factory 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 Tanger Factory 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 Tanger Factory Outlet, you can compare the effects of market volatilities on Corporate Office and Tanger Factory 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 Tanger Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Tanger Factory.
Diversification Opportunities for Corporate Office and Tanger Factory
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Corporate and Tanger is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Tanger Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanger Factory Outlet 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 Tanger Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanger Factory Outlet has no effect on the direction of Corporate Office i.e., Corporate Office and Tanger Factory go up and down completely randomly.
Pair Corralation between Corporate Office and Tanger Factory
Assuming the 90 days horizon Corporate Office is expected to generate 3.5 times less return on investment than Tanger Factory. But when comparing it to its historical volatility, Corporate Office Properties is 1.11 times less risky than Tanger Factory. It trades about 0.08 of its potential returns per unit of risk. Tanger Factory Outlet is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,112 in Tanger Factory Outlet on August 29, 2024 and sell it today you would earn a total of 325.00 from holding Tanger Factory Outlet or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. Tanger Factory Outlet
Performance |
| Timeline |
| Corporate Office Pro |
| Tanger Factory Outlet |
Corporate Office and Tanger Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and Tanger Factory
The main advantage of trading using opposite Corporate Office and Tanger Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Tanger Factory 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 Tanger Factory will offset losses from the drop in Tanger Factory's long position.| Corporate Office vs. Superior Plus Corp | Corporate Office vs. NMI Holdings | Corporate Office vs. SIVERS SEMICONDUCTORS AB | Corporate Office vs. Talanx AG |
| Tanger Factory vs. HomeToGo SE | Tanger Factory vs. Corporate Office Properties | Tanger Factory vs. PSI Software AG | Tanger Factory vs. American Homes 4 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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