Correlation Between Saul Centers and Power REIT
Can any of the company-specific risk be diversified away by investing in both Saul Centers and Power 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 Saul Centers and Power REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saul Centers and Power REIT, you can compare the effects of market volatilities on Saul Centers and Power 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 Saul Centers with a short position of Power REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saul Centers and Power REIT.
Diversification Opportunities for Saul Centers and Power REIT
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saul and Power is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and Power REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power REIT and Saul Centers 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 Saul Centers are associated (or correlated) with Power REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power REIT has no effect on the direction of Saul Centers i.e., Saul Centers and Power REIT go up and down completely randomly.
Pair Corralation between Saul Centers and Power REIT
Considering the 90-day investment horizon Saul Centers is expected to generate 10.96 times less return on investment than Power REIT. But when comparing it to its historical volatility, Saul Centers is 12.12 times less risky than Power REIT. It trades about 0.09 of its potential returns per unit of risk. Power REIT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 69.00 in Power REIT on August 24, 2024 and sell it today you would earn a total of 38.00 from holding Power REIT or generate 55.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saul Centers vs. Power REIT
Performance |
| Timeline |
| Saul Centers |
| Power REIT |
Saul Centers and Power REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saul Centers and Power REIT
The main advantage of trading using opposite Saul Centers and Power REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saul Centers position performs unexpectedly, Power 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 Power REIT will offset losses from the drop in Power REIT's long position.| Saul Centers vs. Urban Edge Properties | Saul Centers vs. Site Centers Corp | Saul Centers vs. Kite Realty Group | Saul Centers vs. Acadia Realty Trust |
| Power REIT vs. Newlake Capital Partners | Power REIT vs. Outfront Media | Power REIT vs. Uniti Group | Power REIT vs. Farmland Partners |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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