Correlation Between Equinix and CoStar
Can any of the company-specific risk be diversified away by investing in both Equinix and CoStar 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 Equinix and CoStar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and CoStar Group, you can compare the effects of market volatilities on Equinix and CoStar 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 Equinix with a short position of CoStar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and CoStar.
Diversification Opportunities for Equinix and CoStar
Excellent diversification
The 3 months correlation between Equinix and CoStar is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar Group and Equinix 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 Equinix are associated (or correlated) with CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of Equinix i.e., Equinix and CoStar go up and down completely randomly.
Pair Corralation between Equinix and CoStar
Given the investment horizon of 90 days Equinix is expected to under-perform the CoStar. But the stock apears to be less risky and, when comparing its historical volatility, Equinix is 1.02 times less risky than CoStar. The stock trades about -0.03 of its potential returns per unit of risk. The CoStar Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8,174 in CoStar Group on April 26, 2025 and sell it today you would earn a total of 1,122 from holding CoStar Group or generate 13.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Equinix vs. CoStar Group
Performance |
Timeline |
Equinix |
CoStar Group |
Equinix and CoStar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Equinix and CoStar
The main advantage of trading using opposite Equinix and CoStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, CoStar 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 CoStar will offset losses from the drop in CoStar's long position.Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
CoStar vs. Jones Lang LaSalle | CoStar vs. Cushman Wakefield plc | CoStar vs. Colliers International Group | CoStar vs. Newmark Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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