Correlation Between Neometals and Alstria Office

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

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

Diversification Opportunities for Neometals and Alstria Office

-0.56

Correlation Coefficient

Neometals  Alstria Office

Excellent diversification

The 3 months correlation between Neometals and Alstria is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Neometals 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 Neometals 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 Neometals 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 Neometals i.e., Neometals and Alstria Office go up and down completely randomly.

Pair Corralation between Neometals and Alstria Office

Assuming the 90 days trading horizon Neometals is expected to under-perform the Alstria Office. In addition to that, Neometals is 1.14 times more volatile than alstria office REIT AG. It trades about -0.29 of its total potential returns per unit of risk. alstria office REIT AG is currently generating about -0.17 per unit of volatility. If you would invest  713.00  in alstria office REIT AG on October 5, 2024 and sell it today you would lose (182.00) from holding alstria office REIT AG or give up 25.53% of portfolio value over 90 days.

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

Neometals  vs.  alstria office REIT AG

Neometals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neometals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

alstria office REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days alstria office REIT AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Alstria Office is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Neometals and Alstria Office

The main advantage of trading using opposite Neometals and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals 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 Neometals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.