Correlation Between Bank Central and COPT Defense
Can any of the company-specific risk be diversified away by investing in both Bank Central and COPT Defense 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 Bank Central and COPT Defense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and COPT Defense Properties, you can compare the effects of market volatilities on Bank Central and COPT Defense 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 Bank Central with a short position of COPT Defense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and COPT Defense.
Diversification Opportunities for Bank Central and COPT Defense
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and COPT is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and COPT Defense Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPT Defense Properties and Bank Central 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 Bank Central Asia are associated (or correlated) with COPT Defense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPT Defense Properties has no effect on the direction of Bank Central i.e., Bank Central and COPT Defense go up and down completely randomly.
Pair Corralation between Bank Central and COPT Defense
Assuming the 90 days horizon Bank Central Asia is expected to under-perform the COPT Defense. In addition to that, Bank Central is 1.73 times more volatile than COPT Defense Properties. It trades about -0.11 of its total potential returns per unit of risk. COPT Defense Properties is currently generating about 0.03 per unit of volatility. If you would invest 2,767 in COPT Defense Properties on July 20, 2025 and sell it today you would earn a total of 38.00 from holding COPT Defense Properties or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. COPT Defense Properties
Performance |
| Timeline |
| Bank Central Asia |
| COPT Defense Properties |
Bank Central and COPT Defense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and COPT Defense
The main advantage of trading using opposite Bank Central and COPT Defense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, COPT Defense 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 COPT Defense will offset losses from the drop in COPT Defense's long position.| Bank Central vs. Nordea Bank Abp | Bank Central vs. China CITIC Bank | Bank Central vs. Oversea Chinese Banking | Bank Central vs. Societe Generale ADR |
| COPT Defense vs. Highwoods Properties | COPT Defense vs. Vornado Realty Trust | COPT Defense vs. Granite Real Estate | COPT Defense vs. Public Storage |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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