Correlation Between FrontView REIT, and Alstria Office

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

By analyzing existing cross correlation between FrontView REIT, and alstria office REIT AG, you can compare the effects of market volatilities on FrontView REIT, and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Alstria Office.

Diversification Opportunities for FrontView REIT, and Alstria Office

0.35

Correlation Coefficient

FrontView REIT,  Alstria Office

Weak diversification

The 3 months correlation between FrontView and Alstria is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Alstria Office go up and down completely randomly.

Pair Corralation between FrontView REIT, and Alstria Office

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Alstria Office. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 1.22 times less risky than Alstria Office. The stock trades about -0.03 of its potential returns per unit of risk. The alstria office REIT AG is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  586.00  in alstria office REIT AG on September 20, 2024 and sell it today you would earn a total of  180.00  from holding alstria office REIT AG or generate 30.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	87.5%
Values	Daily Returns

FrontView REIT,  vs.  alstria office REIT AG

FrontView REIT,

Risk-Adjusted Performance

0 of 100

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 relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

alstria office REIT

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in alstria office REIT AG are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Alstria Office reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FrontView REIT, and Alstria Office

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

The idea behind FrontView REIT, and alstria office REIT 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.