Correlation Between Alstria Office and SOUTHERN PER

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

Diversification Opportunities for Alstria Office and SOUTHERN PER

0.12

Correlation Coefficient

Alstria Office  SOUTHERN PER

Average diversification

The 3 months correlation between Alstria and SOUTHERN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and SOUTHERN PER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER 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 SOUTHERN PER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER has no effect on the direction of Alstria Office i.e., Alstria Office and SOUTHERN PER go up and down completely randomly.

Pair Corralation between Alstria Office and SOUTHERN PER

Assuming the 90 days horizon Alstria Office is expected to generate 1.9 times less return on investment than SOUTHERN PER. In addition to that, Alstria Office is 1.36 times more volatile than SOUTHERN PER . It trades about 0.02 of its total potential returns per unit of risk. SOUTHERN PER is currently generating about 0.05 per unit of volatility. If you would invest  6,247  in SOUTHERN PER on October 27, 2024 and sell it today you would earn a total of  2,999  from holding SOUTHERN PER or generate 48.01% return on investment over 90 days.

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

alstria office REIT AG  vs.  SOUTHERN PER

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 latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SOUTHERN PER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOUTHERN PER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Alstria Office and SOUTHERN PER

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

The idea behind alstria office REIT AG and SOUTHERN PER 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.