Correlation Between Corporate Office and Gentex
Can any of the company-specific risk be diversified away by investing in both Corporate Office and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on Corporate Office and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Gentex.
Diversification Opportunities for Corporate Office and Gentex
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Corporate and Gentex is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Corporate Office i.e., Corporate Office and Gentex go up and down completely randomly.
Pair Corralation between Corporate Office and Gentex
Assuming the 90 days horizon Corporate Office Properties is expected to generate 0.78 times more return on investment than Gentex. However, Corporate Office Properties is 1.28 times less risky than Gentex. It trades about 0.14 of its potential returns per unit of risk. Gentex is currently generating about 0.06 per unit of risk. If you would invest 2,671 in Corporate Office Properties on September 23, 2024 and sell it today you would earn a total of 289.00 from holding Corporate Office Properties or generate 10.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Corporate Office Properties vs. Gentex
Performance |
Timeline |
Corporate Office Pro |
Gentex |
Corporate Office and Gentex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Corporate Office and Gentex
The main advantage of trading using opposite Corporate Office and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.Corporate Office vs. Digital Realty Trust | Corporate Office vs. Gecina SA | Corporate Office vs. Japan Real Estate | Corporate Office vs. Mirvac Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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