Correlation Between Hammerson PLC and Alstria Office

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

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

Diversification Opportunities for Hammerson PLC and Alstria Office

-0.87

Correlation Coefficient

Hammerson PLC  Alstria Office

Pay attention - limited upside

The 3 months correlation between Hammerson and Alstria is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC 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 Hammerson PLC 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 Hammerson PLC 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 Hammerson PLC i.e., Hammerson PLC and Alstria Office go up and down completely randomly.

Pair Corralation between Hammerson PLC and Alstria Office

Assuming the 90 days trading horizon Hammerson PLC is expected to generate 11.94 times more return on investment than Alstria Office. However, Hammerson PLC is 11.94 times more volatile than alstria office REIT AG. It trades about 0.04 of its potential returns per unit of risk. alstria office REIT AG is currently generating about 0.04 per unit of risk. If you would invest  23,800  in Hammerson PLC on September 20, 2024 and sell it today you would earn a total of  4,020  from holding Hammerson PLC or generate 16.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Hammerson PLC  vs.  alstria office REIT AG

Hammerson PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hammerson PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private 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 quite unsteady essential indicators, Alstria Office disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hammerson PLC and Alstria Office

The main advantage of trading using opposite Hammerson PLC and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammerson PLC 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 Hammerson PLC 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.