Correlation Between Alstria Office and PEPTONIC MEDICAL

Can any of the company-specific risk be diversified away by investing in both Alstria Office and PEPTONIC MEDICAL 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 PEPTONIC MEDICAL 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 PEPTONIC MEDICAL, you can compare the effects of market volatilities on Alstria Office and PEPTONIC MEDICAL 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 PEPTONIC MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and PEPTONIC MEDICAL.

Diversification Opportunities for Alstria Office and PEPTONIC MEDICAL

0.0

Correlation Coefficient

Alstria Office  PEPTONIC MEDICAL

Pay attention - limited upside

The 3 months correlation between Alstria and PEPTONIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and PEPTONIC MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPTONIC MEDICAL 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 PEPTONIC MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPTONIC MEDICAL has no effect on the direction of Alstria Office i.e., Alstria Office and PEPTONIC MEDICAL go up and down completely randomly.

Pair Corralation between Alstria Office and PEPTONIC MEDICAL

Assuming the 90 days horizon Alstria Office is expected to generate 95.71 times less return on investment than PEPTONIC MEDICAL. But when comparing it to its historical volatility, alstria office REIT AG is 19.67 times less risky than PEPTONIC MEDICAL. It trades about 0.01 of its potential returns per unit of risk. PEPTONIC MEDICAL is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.24  in PEPTONIC MEDICAL on October 11, 2024 and sell it today you would lose (0.22) from holding PEPTONIC MEDICAL or give up 91.67% of portfolio value over 90 days.

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

alstria office REIT AG  vs.  PEPTONIC MEDICAL

alstria office REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days alstria office REIT AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Alstria Office is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PEPTONIC MEDICAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PEPTONIC MEDICAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PEPTONIC MEDICAL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alstria Office and PEPTONIC MEDICAL

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

The idea behind alstria office REIT AG and PEPTONIC MEDICAL 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.