Correlation Between Cofinimmo and Care Property

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

By analyzing existing cross correlation between Cofinimmo SA and Care Property Invest, you can compare the effects of market volatilities on Cofinimmo and Care Property 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 Cofinimmo with a short position of Care Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofinimmo and Care Property.

Diversification Opportunities for Cofinimmo and Care Property

0.91

Correlation Coefficient

Cofinimmo  Care Property

Almost no diversification

The 3 months correlation between Cofinimmo and Care is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cofinimmo SA and Care Property Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Care Property Invest and Cofinimmo 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 Cofinimmo SA are associated (or correlated) with Care Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Care Property Invest has no effect on the direction of Cofinimmo i.e., Cofinimmo and Care Property go up and down completely randomly.

Pair Corralation between Cofinimmo and Care Property

Assuming the 90 days trading horizon Cofinimmo SA is expected to generate 0.9 times more return on investment than Care Property. However, Cofinimmo SA is 1.1 times less risky than Care Property. It trades about -0.12 of its potential returns per unit of risk. Care Property Invest is currently generating about -0.19 per unit of risk. If you would invest  6,250  in Cofinimmo SA on August 31, 2024 and sell it today you would lose (570.00) from holding Cofinimmo SA or give up 9.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Cofinimmo SA  vs.  Care Property Invest

Cofinimmo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cofinimmo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Care Property Invest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Care Property Invest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Cofinimmo and Care Property

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

The idea behind Cofinimmo SA and Care Property Invest 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.