Correlation Between Immofonds and Procimmo Real

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

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

Diversification Opportunities for Immofonds and Procimmo Real

0.46

Correlation Coefficient

Immofonds  Procimmo Real

Very weak diversification

The 3 months correlation between Immofonds and Procimmo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Immofonds and Procimmo Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procimmo Real Estate and Immofonds 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 Immofonds are associated (or correlated) with Procimmo Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procimmo Real Estate has no effect on the direction of Immofonds i.e., Immofonds and Procimmo Real go up and down completely randomly.

Pair Corralation between Immofonds and Procimmo Real

Assuming the 90 days horizon Immofonds is expected to generate 1.24 times less return on investment than Procimmo Real. But when comparing it to its historical volatility, Immofonds is 1.05 times less risky than Procimmo Real. It trades about 0.06 of its potential returns per unit of risk. Procimmo Real Estate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  14,300  in Procimmo Real Estate on October 2, 2024 and sell it today you would earn a total of  2,400  from holding Procimmo Real Estate or generate 16.78% return on investment over 90 days.

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

Immofonds  vs.  Procimmo Real Estate

Immofonds

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Immofonds are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly sluggish basic indicators, Immofonds may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Procimmo Real Estate

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Procimmo Real Estate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Procimmo Real is not utilizing all of its potentials. The new stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Immofonds and Procimmo Real

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

The idea behind Immofonds and Procimmo Real Estate 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.