Correlation Between CA Immobilien and IMMOFINANZ

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

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

Diversification Opportunities for CA Immobilien and IMMOFINANZ

-0.07

Correlation Coefficient

CA Immobilien  IMMOFINANZ

Good diversification

The 3 months correlation between CAI and IMMOFINANZ is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CA Immobilien Anlagen and IMMOFINANZ AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMMOFINANZ AG and CA Immobilien 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 CA Immobilien Anlagen are associated (or correlated) with IMMOFINANZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMMOFINANZ AG has no effect on the direction of CA Immobilien i.e., CA Immobilien and IMMOFINANZ go up and down completely randomly.

Pair Corralation between CA Immobilien and IMMOFINANZ

Assuming the 90 days trading horizon CA Immobilien Anlagen is expected to under-perform the IMMOFINANZ. But the stock apears to be less risky and, when comparing its historical volatility, CA Immobilien Anlagen is 1.28 times less risky than IMMOFINANZ. The stock trades about -0.01 of its potential returns per unit of risk. The IMMOFINANZ AG is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,105  in IMMOFINANZ AG on March 5, 2024 and sell it today you would earn a total of  290.00  from holding IMMOFINANZ AG or generate 13.78% return on investment over 90 days.

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

CA Immobilien Anlagen  vs.  IMMOFINANZ AG

CA Immobilien Anlagen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CA Immobilien Anlagen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, CA Immobilien is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

IMMOFINANZ AG

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IMMOFINANZ AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, IMMOFINANZ demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CA Immobilien and IMMOFINANZ

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

The idea behind CA Immobilien Anlagen and IMMOFINANZ AG 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.