Correlation Between SF Sustainable and Immofonds

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

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

Diversification Opportunities for SF Sustainable and Immofonds

0.35

Correlation Coefficient

SF Sustainable  Immofonds

Weak diversification

The 3 months correlation between SFPF and Immofonds is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SF Sustainable Property and Immofonds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immofonds and SF Sustainable 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 SF Sustainable Property are associated (or correlated) with Immofonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immofonds has no effect on the direction of SF Sustainable i.e., SF Sustainable and Immofonds go up and down completely randomly.

Pair Corralation between SF Sustainable and Immofonds

Assuming the 90 days trading horizon SF Sustainable is expected to generate 3.87 times less return on investment than Immofonds. In addition to that, SF Sustainable is 1.13 times more volatile than Immofonds. It trades about 0.03 of its total potential returns per unit of risk. Immofonds is currently generating about 0.15 per unit of volatility. If you would invest  54,400  in Immofonds on October 5, 2024 and sell it today you would earn a total of  3,800  from holding Immofonds or generate 6.99% return on investment over 90 days.

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

SF Sustainable Property  vs.  Immofonds

SF Sustainable Property

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SF Sustainable Property are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, SF Sustainable is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Immofonds

Risk-Adjusted Performance

0 of 100

Good

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

Pair Trading with SF Sustainable and Immofonds

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

The idea behind SF Sustainable Property and Immofonds 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.