Correlation Between Procimmo Real and Zug Estates

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

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

Diversification Opportunities for Procimmo Real and Zug Estates

0.53

Correlation Coefficient

Procimmo Real  Zug Estates

Very weak diversification

The 3 months correlation between Procimmo and Zug is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Procimmo Real Estate and Zug Estates Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zug Estates Holding and Procimmo Real 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 Procimmo Real Estate are associated (or correlated) with Zug Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zug Estates Holding has no effect on the direction of Procimmo Real i.e., Procimmo Real and Zug Estates go up and down completely randomly.

Pair Corralation between Procimmo Real and Zug Estates

Assuming the 90 days trading horizon Procimmo Real Estate is expected to generate 0.94 times more return on investment than Zug Estates. However, Procimmo Real Estate is 1.07 times less risky than Zug Estates. It trades about 0.1 of its potential returns per unit of risk. Zug Estates Holding is currently generating about 0.04 per unit of risk. If you would invest  16,200  in Procimmo Real Estate on October 8, 2024 and sell it today you would earn a total of  220.00  from holding Procimmo Real Estate or generate 1.36% return on investment over 90 days.

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

Procimmo Real Estate  vs.  Zug Estates Holding

Procimmo Real Estate

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Procimmo Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, Procimmo Real is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Zug Estates Holding

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Zug Estates Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Zug Estates may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Procimmo Real and Zug Estates

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

The idea behind Procimmo Real Estate and Zug Estates Holding 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.