Correlation Between Inmobiliaria Colonial and Japan Real

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

By analyzing existing cross correlation between Inmobiliaria Colonial SOCIMI and Japan Real Estate, you can compare the effects of market volatilities on Inmobiliaria Colonial and Japan Real 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 Inmobiliaria Colonial with a short position of Japan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inmobiliaria Colonial and Japan Real.

Diversification Opportunities for Inmobiliaria Colonial and Japan Real

0.04

Correlation Coefficient

Inmobiliaria Colonial  Japan Real

Significant diversification

The 3 months correlation between Inmobiliaria and Japan is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Inmobiliaria Colonial SOCIMI and Japan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Real Estate and Inmobiliaria Colonial 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 Inmobiliaria Colonial SOCIMI are associated (or correlated) with Japan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Real Estate has no effect on the direction of Inmobiliaria Colonial i.e., Inmobiliaria Colonial and Japan Real go up and down completely randomly.

Pair Corralation between Inmobiliaria Colonial and Japan Real

Assuming the 90 days trading horizon Inmobiliaria Colonial SOCIMI is expected to generate 1.49 times more return on investment than Japan Real. However, Inmobiliaria Colonial is 1.49 times more volatile than Japan Real Estate. It trades about 0.15 of its potential returns per unit of risk. Japan Real Estate is currently generating about -0.03 per unit of risk. If you would invest  540.00  in Inmobiliaria Colonial SOCIMI on April 24, 2025 and sell it today you would earn a total of  56.00  from holding Inmobiliaria Colonial SOCIMI or generate 10.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Inmobiliaria Colonial SOCIMI  vs.  Japan Real Estate

Inmobiliaria Colonial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inmobiliaria Colonial SOCIMI are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Inmobiliaria Colonial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Japan Real Estate

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Inmobiliaria Colonial and Japan Real

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

The idea behind Inmobiliaria Colonial SOCIMI and Japan Real Estate 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.