Correlation Between Highwoods Properties and Gecina SA

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

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

Diversification Opportunities for Highwoods Properties and Gecina SA

-0.18

Correlation Coefficient

Highwoods Properties  Gecina SA

Good diversification

The 3 months correlation between Highwoods and Gecina is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Highwoods Properties and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA and Highwoods Properties 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 Highwoods Properties are associated (or correlated) with Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Highwoods Properties i.e., Highwoods Properties and Gecina SA go up and down completely randomly.

Pair Corralation between Highwoods Properties and Gecina SA

Considering the 90-day investment horizon Highwoods Properties is expected to under-perform the Gecina SA. In addition to that, Highwoods Properties is 1.03 times more volatile than Gecina SA. It trades about -0.01 of its total potential returns per unit of risk. Gecina SA is currently generating about 0.09 per unit of volatility. If you would invest  9,044  in Gecina SA on December 29, 2024 and sell it today you would earn a total of  712.00  from holding Gecina SA or generate 7.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Highwoods Properties  vs.  Gecina SA

Highwoods Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Highwoods Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Highwoods Properties is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gecina SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gecina SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Gecina SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Highwoods Properties and Gecina SA

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

The idea behind Highwoods Properties and Gecina SA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.