Correlation Between Alexandria Real and Cencora
Can any of the company-specific risk be diversified away by investing in both Alexandria Real and Cencora 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 Alexandria Real and Cencora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexandria Real Estate and Cencora, you can compare the effects of market volatilities on Alexandria Real and Cencora 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 Alexandria Real with a short position of Cencora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria Real and Cencora.
Diversification Opportunities for Alexandria Real and Cencora
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alexandria and Cencora is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria Real Estate and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora and Alexandria 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 Alexandria Real Estate are associated (or correlated) with Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Alexandria Real i.e., Alexandria Real and Cencora go up and down completely randomly.
Pair Corralation between Alexandria Real and Cencora
Considering the 90-day investment horizon Alexandria Real Estate is expected to under-perform the Cencora. In addition to that, Alexandria Real is 2.53 times more volatile than Cencora. It trades about -0.05 of its total potential returns per unit of risk. Cencora is currently generating about -0.12 per unit of volatility. If you would invest 24,280 in Cencora on January 26, 2024 and sell it today you would lose (485.00) from holding Cencora or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alexandria Real Estate vs. Cencora
Performance |
| Timeline |
| Alexandria Real Estate |
| Cencora |
Alexandria Real and Cencora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexandria Real and Cencora
The main advantage of trading using opposite Alexandria Real and Cencora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexandria Real position performs unexpectedly, Cencora 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 Cencora will offset losses from the drop in Cencora's long position.| Alexandria Real vs. Equity Commonwealth | Alexandria Real vs. Piedmont Office Realty | Alexandria Real vs. Hudson Pacific Properties |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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