Correlation Between FrontView REIT, and Cathay Nikkei

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

By analyzing existing cross correlation between FrontView REIT, and Cathay Nikkei 225, you can compare the effects of market volatilities on FrontView REIT, and Cathay Nikkei 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 FrontView REIT, with a short position of Cathay Nikkei. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Cathay Nikkei.

Diversification Opportunities for FrontView REIT, and Cathay Nikkei

-0.25

Correlation Coefficient

FrontView REIT,  Cathay Nikkei

Very good diversification

The 3 months correlation between FrontView and Cathay is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Cathay Nikkei 225 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Nikkei 225 and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with Cathay Nikkei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Nikkei 225 has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Cathay Nikkei go up and down completely randomly.

Pair Corralation between FrontView REIT, and Cathay Nikkei

Considering the 90-day investment horizon FrontView REIT, is expected to generate 1.41 times more return on investment than Cathay Nikkei. However, FrontView REIT, is 1.41 times more volatile than Cathay Nikkei 225. It trades about -0.06 of its potential returns per unit of risk. Cathay Nikkei 225 is currently generating about -0.14 per unit of risk. If you would invest  1,713  in FrontView REIT, on December 5, 2024 and sell it today you would lose (33.00) from holding FrontView REIT, or give up 1.93% of portfolio value over 90 days.

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

FrontView REIT,  vs.  Cathay Nikkei 225

FrontView REIT,

Risk-Adjusted Performance

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile 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.

Cathay Nikkei 225

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cathay Nikkei 225 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with FrontView REIT, and Cathay Nikkei

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

The idea behind FrontView REIT, and Cathay Nikkei 225 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.