Correlation Between Vornado Realty and Mongolia Growth

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

By analyzing existing cross correlation between Vornado Realty Trust and Mongolia Growth Group, you can compare the effects of market volatilities on Vornado Realty and Mongolia Growth 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 Vornado Realty with a short position of Mongolia Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vornado Realty and Mongolia Growth.

Diversification Opportunities for Vornado Realty and Mongolia Growth

-0.02

Correlation Coefficient

Vornado Realty  Mongolia Growth

Good diversification

The 3 months correlation between Vornado and Mongolia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Vornado Realty Trust and Mongolia Growth Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mongolia Growth Group and Vornado Realty 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 Vornado Realty Trust are associated (or correlated) with Mongolia Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mongolia Growth Group has no effect on the direction of Vornado Realty i.e., Vornado Realty and Mongolia Growth go up and down completely randomly.

Pair Corralation between Vornado Realty and Mongolia Growth

Considering the 90-day investment horizon Vornado Realty Trust is expected to under-perform the Mongolia Growth. But the stock apears to be less risky and, when comparing its historical volatility, Vornado Realty Trust is 1.02 times less risky than Mongolia Growth. The stock trades about -0.11 of its potential returns per unit of risk. The Mongolia Growth Group is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Mongolia Growth Group on October 11, 2024 and sell it today you would lose (6.00) from holding Mongolia Growth Group or give up 5.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Vornado Realty Trust  vs.  Mongolia Growth Group

Vornado Realty Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vornado Realty Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Vornado Realty is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Mongolia Growth Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mongolia Growth Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Vornado Realty and Mongolia Growth

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

The idea behind Vornado Realty Trust and Mongolia Growth Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.