Correlation Between Tokyu REIT and Brenntag

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

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

Diversification Opportunities for Tokyu REIT and Brenntag

-0.79

Correlation Coefficient

Tokyu REIT  Brenntag

Pay attention - limited upside

The 3 months correlation between Tokyu and Brenntag is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tokyu REIT and Brenntag SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenntag SE and Tokyu REIT 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 Tokyu REIT are associated (or correlated) with Brenntag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenntag SE has no effect on the direction of Tokyu REIT i.e., Tokyu REIT and Brenntag go up and down completely randomly.

Pair Corralation between Tokyu REIT and Brenntag

If you would invest  137,857  in Tokyu REIT on February 23, 2024 and sell it today you would earn a total of  0.00  from holding Tokyu REIT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Tokyu REIT  vs.  Brenntag SE

Tokyu REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tokyu REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Tokyu REIT is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Brenntag SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brenntag SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Tokyu REIT and Brenntag

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

The idea behind Tokyu REIT and Brenntag SE 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.