Correlation Between Alumina and Artis REIT
Can any of the company-specific risk be diversified away by investing in both Alumina and Artis REIT 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 Alumina and Artis REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumina Limited and Artis REIT, you can compare the effects of market volatilities on Alumina and Artis REIT 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 Alumina with a short position of Artis REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumina and Artis REIT.
Diversification Opportunities for Alumina and Artis REIT
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alumina and Artis is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alumina Limited and Artis REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artis REIT and Alumina 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 Alumina Limited are associated (or correlated) with Artis REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artis REIT has no effect on the direction of Alumina i.e., Alumina and Artis REIT go up and down completely randomly.
Pair Corralation between Alumina and Artis REIT
Assuming the 90 days horizon Alumina Limited is expected to generate 1.63 times more return on investment than Artis REIT. However, Alumina is 1.63 times more volatile than Artis REIT. It trades about 0.15 of its potential returns per unit of risk. Artis REIT is currently generating about 0.08 per unit of risk. If you would invest 54.00 in Alumina Limited on August 26, 2024 and sell it today you would earn a total of 57.00 from holding Alumina Limited or generate 105.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.37% |
| Values | Daily Returns |
Alumina Limited vs. Artis REIT
Performance |
| Timeline |
| Alumina Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Artis REIT |
Alumina and Artis REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumina and Artis REIT
The main advantage of trading using opposite Alumina and Artis REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumina position performs unexpectedly, Artis REIT 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 Artis REIT will offset losses from the drop in Artis REIT's long position.| Alumina vs. Merit Medical Systems | Alumina vs. Lipocine | Alumina vs. Albertsons Companies | Alumina vs. National Beverage Corp |
| Artis REIT vs. Smart REIT | Artis REIT vs. Phillips Edison Co | Artis REIT vs. Simon Property Group | Artis REIT vs. Plaza Retail REIT |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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