Correlation Between CBL Associates and RPT Realty
Can any of the company-specific risk be diversified away by investing in both CBL Associates and RPT Realty 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 CBL Associates and RPT Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBL Associates Properties and RPT Realty, you can compare the effects of market volatilities on CBL Associates and RPT Realty 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 CBL Associates with a short position of RPT Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL Associates and RPT Realty.
Diversification Opportunities for CBL Associates and RPT Realty
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CBL and RPT is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CBL Associates Properties and RPT Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPT Realty and CBL Associates 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 CBL Associates Properties are associated (or correlated) with RPT Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPT Realty has no effect on the direction of CBL Associates i.e., CBL Associates and RPT Realty go up and down completely randomly.
Pair Corralation between CBL Associates and RPT Realty
Considering the 90-day investment horizon CBL Associates is expected to generate 1.08 times less return on investment than RPT Realty. But when comparing it to its historical volatility, CBL Associates Properties is 1.3 times less risky than RPT Realty. It trades about 0.04 of its potential returns per unit of risk. RPT Realty is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,042 in RPT Realty on August 28, 2024 and sell it today you would earn a total of 69.00 from holding RPT Realty or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.72% |
| Values | Daily Returns |
CBL Associates Properties vs. RPT Realty
Performance |
| Timeline |
| CBL Associates Properties |
| RPT Realty |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CBL Associates and RPT Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBL Associates and RPT Realty
The main advantage of trading using opposite CBL Associates and RPT Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBL Associates position performs unexpectedly, RPT Realty 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 RPT Realty will offset losses from the drop in RPT Realty's long position.| CBL Associates vs. Investcorp Credit Management | CBL Associates vs. Medalist Diversified Reit | CBL Associates vs. Aquagold International | CBL Associates vs. Morningstar Unconstrained Allocation |
| RPT Realty vs. Urban Edge Properties | RPT Realty vs. Kite Realty Group | RPT Realty vs. Retail Opportunity Investments | RPT Realty vs. Inventrust Properties Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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