Correlation Between Corporate Office and Klépierre

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

By analyzing existing cross correlation between Corporate Office Properties and Klpierre SA, you can compare the effects of market volatilities on Corporate Office and Klépierre 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 Corporate Office with a short position of Klépierre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and Klépierre.

Diversification Opportunities for Corporate Office and Klépierre

-0.94

Correlation Coefficient

Corporate Office  Klépierre

Pay attention - limited upside

The 3 months correlation between Corporate and Klépierre is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA and Corporate Office 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 Corporate Office Properties are associated (or correlated) with Klépierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Corporate Office i.e., Corporate Office and Klépierre go up and down completely randomly.

Pair Corralation between Corporate Office and Klépierre

Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the Klépierre. In addition to that, Corporate Office is 1.33 times more volatile than Klpierre SA. It trades about -0.21 of its total potential returns per unit of risk. Klpierre SA is currently generating about 0.19 per unit of volatility. If you would invest  2,700  in Klpierre SA on December 25, 2024 and sell it today you would earn a total of  338.00  from holding Klpierre SA or generate 12.52% return on investment over 90 days.

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

Corporate Office Properties  vs.  Klpierre SA

Corporate Office Pro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corporate Office Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Klpierre SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Klpierre SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Klépierre reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corporate Office and Klépierre

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

The idea behind Corporate Office Properties and Klpierre SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.