Correlation Between Eurocommercial Properties and IShares Treasury

Can any of the company-specific risk be diversified away by investing in both Eurocommercial Properties and IShares Treasury 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 Eurocommercial Properties and IShares Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eurocommercial Properties NV and iShares Treasury Bond, you can compare the effects of market volatilities on Eurocommercial Properties and IShares Treasury 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 Eurocommercial Properties with a short position of IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurocommercial Properties and IShares Treasury.

Diversification Opportunities for Eurocommercial Properties and IShares Treasury

-0.87

Correlation Coefficient

Eurocommercial Properties  IShares Treasury

Pay attention - limited upside

The 3 months correlation between Eurocommercial and IShares is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eurocommercial Properties NV and iShares Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Bond and Eurocommercial Properties 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 Eurocommercial Properties NV are associated (or correlated) with IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Bond has no effect on the direction of Eurocommercial Properties i.e., Eurocommercial Properties and IShares Treasury go up and down completely randomly.

Pair Corralation between Eurocommercial Properties and IShares Treasury

Assuming the 90 days trading horizon Eurocommercial Properties NV is expected to under-perform the IShares Treasury. In addition to that, Eurocommercial Properties is 2.72 times more volatile than iShares Treasury Bond. It trades about -0.1 of its total potential returns per unit of risk. iShares Treasury Bond is currently generating about 0.24 per unit of volatility. If you would invest  12,044  in iShares Treasury Bond on September 20, 2024 and sell it today you would earn a total of  278.00  from holding iShares Treasury Bond or generate 2.31% return on investment over 90 days.

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

Eurocommercial Properties NV  vs.  iShares Treasury Bond

Eurocommercial Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurocommercial Properties NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

iShares Treasury Bond

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Treasury Bond are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares Treasury may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eurocommercial Properties and IShares Treasury

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

The idea behind Eurocommercial Properties NV and iShares Treasury Bond 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.