Correlation Between Alstria Office and CN YANGTPWR

Can any of the company-specific risk be diversified away by investing in both Alstria Office and CN YANGTPWR 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 Alstria Office and CN YANGTPWR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between alstria office REIT AG and CN YANGTPWR GDR, you can compare the effects of market volatilities on Alstria Office and CN YANGTPWR 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 Alstria Office with a short position of CN YANGTPWR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and CN YANGTPWR.

Diversification Opportunities for Alstria Office and CN YANGTPWR

-0.28

Correlation Coefficient

Alstria Office  CN YANGTPWR

Very good diversification

The 3 months correlation between Alstria and CYZB is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and CN YANGTPWR GDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN YANGTPWR GDR and Alstria 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 alstria office REIT AG are associated (or correlated) with CN YANGTPWR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN YANGTPWR GDR has no effect on the direction of Alstria Office i.e., Alstria Office and CN YANGTPWR go up and down completely randomly.

Pair Corralation between Alstria Office and CN YANGTPWR

Assuming the 90 days horizon alstria office REIT AG is expected to generate 0.43 times more return on investment than CN YANGTPWR. However, alstria office REIT AG is 2.3 times less risky than CN YANGTPWR. It trades about 0.24 of its potential returns per unit of risk. CN YANGTPWR GDR is currently generating about 0.09 per unit of risk. If you would invest  600.00  in alstria office REIT AG on September 27, 2024 and sell it today you would earn a total of  164.00  from holding alstria office REIT AG or generate 27.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

alstria office REIT AG  vs.  CN YANGTPWR GDR

alstria office REIT

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in alstria office REIT AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Alstria Office reported solid returns over the last few months and may actually be approaching a breakup point.

CN YANGTPWR GDR

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CN YANGTPWR GDR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CN YANGTPWR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alstria Office and CN YANGTPWR

The main advantage of trading using opposite Alstria Office and CN YANGTPWR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office position performs unexpectedly, CN YANGTPWR 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 CN YANGTPWR will offset losses from the drop in CN YANGTPWR's long position.

The idea behind alstria office REIT AG and CN YANGTPWR GDR 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.