Correlation Between Saul Centers and Retail Opportunity
Can any of the company-specific risk be diversified away by investing in both Saul Centers and Retail Opportunity 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 Retail Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saul Centers and Retail Opportunity Investments, you can compare the effects of market volatilities on Saul Centers and Retail Opportunity 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 Retail Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saul Centers and Retail Opportunity.
Diversification Opportunities for Saul Centers and Retail Opportunity
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Saul and Retail is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and Retail Opportunity Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Opportunity 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 Retail Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Opportunity has no effect on the direction of Saul Centers i.e., Saul Centers and Retail Opportunity go up and down completely randomly.
Pair Corralation between Saul Centers and Retail Opportunity
Considering the 90-day investment horizon Saul Centers is expected to under-perform the Retail Opportunity. But the stock apears to be less risky and, when comparing its historical volatility, Saul Centers is 1.55 times less risky than Retail Opportunity. The stock trades about -0.01 of its potential returns per unit of risk. The Retail Opportunity Investments is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,567 in Retail Opportunity Investments on August 23, 2024 and sell it today you would earn a total of 170.00 from holding Retail Opportunity Investments or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saul Centers vs. Retail Opportunity Investments
Performance |
| Timeline |
| Saul Centers |
| Retail Opportunity |
Saul Centers and Retail Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saul Centers and Retail Opportunity
The main advantage of trading using opposite Saul Centers and Retail Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saul Centers position performs unexpectedly, Retail Opportunity 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 Retail Opportunity will offset losses from the drop in Retail Opportunity'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 |
| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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