Correlation Between Vicinity Centres and Macerich
Can any of the company-specific risk be diversified away by investing in both Vicinity Centres and Macerich 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 Vicinity Centres and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Centres and The Macerich, you can compare the effects of market volatilities on Vicinity Centres and Macerich 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 Vicinity Centres with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity Centres and Macerich.
Diversification Opportunities for Vicinity Centres and Macerich
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vicinity and Macerich is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Centres and The Macerich in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and Vicinity Centres 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 Vicinity Centres are associated (or correlated) with Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Vicinity Centres i.e., Vicinity Centres and Macerich go up and down completely randomly.
Pair Corralation between Vicinity Centres and Macerich
Assuming the 90 days horizon Vicinity Centres is expected to generate 2.81 times less return on investment than Macerich. But when comparing it to its historical volatility, Vicinity Centres is 1.52 times less risky than Macerich. It trades about 0.03 of its potential returns per unit of risk. The Macerich is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,036 in The Macerich on September 2, 2024 and sell it today you would earn a total of 949.00 from holding The Macerich or generate 91.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vicinity Centres vs. The Macerich
Performance |
| Timeline |
| Vicinity Centres |
| Macerich |
Vicinity Centres and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vicinity Centres and Macerich
The main advantage of trading using opposite Vicinity Centres and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity Centres position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Vicinity Centres vs. USWE SPORTS AB | Vicinity Centres vs. Gaztransport Technigaz SA | Vicinity Centres vs. SPORTING | Vicinity Centres vs. DICKS Sporting Goods |
| Macerich vs. SBI Insurance Group | Macerich vs. Universal Insurance Holdings | Macerich vs. Singapore Reinsurance | Macerich vs. Zurich Insurance 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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