Correlation Between Immofinanz and Citycon Oyj

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

By analyzing existing cross correlation between Immofinanz AG and Citycon Oyj, you can compare the effects of market volatilities on Immofinanz and Citycon Oyj 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 Immofinanz with a short position of Citycon Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immofinanz and Citycon Oyj.

Diversification Opportunities for Immofinanz and Citycon Oyj

0.78

Correlation Coefficient

Immofinanz  Citycon Oyj

Poor diversification

The 3 months correlation between Immofinanz and Citycon is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Immofinanz AG and Citycon Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citycon Oyj and Immofinanz 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 Immofinanz AG are associated (or correlated) with Citycon Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citycon Oyj has no effect on the direction of Immofinanz i.e., Immofinanz and Citycon Oyj go up and down completely randomly.

Pair Corralation between Immofinanz and Citycon Oyj

Assuming the 90 days trading horizon Immofinanz AG is expected to under-perform the Citycon Oyj. In addition to that, Immofinanz is 1.77 times more volatile than Citycon Oyj. It trades about -0.24 of its total potential returns per unit of risk. Citycon Oyj is currently generating about -0.19 per unit of volatility. If you would invest  394.00  in Citycon Oyj on September 23, 2024 and sell it today you would lose (81.00) from holding Citycon Oyj or give up 20.56% of portfolio value over 90 days.

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

Immofinanz AG  vs.  Citycon Oyj

Immofinanz AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immofinanz AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Citycon Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citycon Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Immofinanz and Citycon Oyj

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

The idea behind Immofinanz AG and Citycon Oyj 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.