Correlation Between Equity Residential and Plus500

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Equity Residential and Plus500 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 Equity Residential and Plus500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Residential and Plus500, you can compare the effects of market volatilities on Equity Residential and Plus500 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 Equity Residential with a short position of Plus500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Residential and Plus500.

Diversification Opportunities for Equity Residential and Plus500

0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Equity and Plus500 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Equity Residential and Plus500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plus500 and Equity Residential 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 Equity Residential are associated (or correlated) with Plus500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plus500 has no effect on the direction of Equity Residential i.e., Equity Residential and Plus500 go up and down completely randomly.

Pair Corralation between Equity Residential and Plus500

Considering the 90-day investment horizon Equity Residential is expected to generate 1.25 times less return on investment than Plus500. In addition to that, Equity Residential is 1.1 times more volatile than Plus500. It trades about 0.01 of its total potential returns per unit of risk. Plus500 is currently generating about 0.01 per unit of volatility. If you would invest  1,940  in Plus500 on May 14, 2022 and sell it today you would earn a total of  18.00  from holding Plus500 or generate 0.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Equity Residential  vs.  Plus500

 Performance (%) 
       Timeline  
Equity Residential 
Equity Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Equity Residential are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Equity Residential may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Equity Price Channel

Plus500 
Plus500 Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Plus500 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Plus500 may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Plus500 Price Channel

Equity Residential and Plus500 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Equity Residential and Plus500

The main advantage of trading using opposite Equity Residential and Plus500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Residential position performs unexpectedly, Plus500 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 Plus500 will offset losses from the drop in Plus500's long position.
The idea behind Equity Residential and Plus500 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go