Correlation Between FrontView REIT, and Electronic City

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

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

Diversification Opportunities for FrontView REIT, and Electronic City

0.48

Correlation Coefficient

FrontView REIT,  Electronic City

Very weak diversification

The 3 months correlation between FrontView and Electronic is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Electronic City Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic City Indonesia 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 Electronic City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic City Indonesia has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Electronic City go up and down completely randomly.

Pair Corralation between FrontView REIT, and Electronic City

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Electronic City. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 10.45 times less risky than Electronic City. The stock trades about 0.0 of its potential returns per unit of risk. The Electronic City Indonesia is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  16,400  in Electronic City Indonesia on September 13, 2024 and sell it today you would earn a total of  15,200  from holding Electronic City Indonesia or generate 92.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

FrontView REIT,  vs.  Electronic City Indonesia

FrontView REIT,

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FrontView REIT, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Electronic City Indonesia

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Electronic City Indonesia are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Electronic City disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FrontView REIT, and Electronic City

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

The idea behind FrontView REIT, and Electronic City Indonesia 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.