Correlation Between CTO Realty and Real Estate
Can any of the company-specific risk be diversified away by investing in both CTO Realty and Real Estate 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 CTO Realty and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTO Realty Growth and The Real Estate, you can compare the effects of market volatilities on CTO Realty and Real Estate 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 CTO Realty with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and Real Estate.
Diversification Opportunities for CTO Realty and Real Estate
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between CTO and Real is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and The Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate and CTO Realty 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 CTO Realty Growth are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate has no effect on the direction of CTO Realty i.e., CTO Realty and Real Estate go up and down completely randomly.
Pair Corralation between CTO Realty and Real Estate
Considering the 90-day investment horizon CTO Realty is expected to generate 1.03 times less return on investment than Real Estate. In addition to that, CTO Realty is 1.16 times more volatile than The Real Estate. It trades about 0.04 of its total potential returns per unit of risk. The Real Estate is currently generating about 0.04 per unit of volatility. If you would invest 3,543 in The Real Estate on August 27, 2024 and sell it today you would earn a total of 866.00 from holding The Real Estate or generate 24.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTO Realty Growth vs. The Real Estate
Performance |
| Timeline |
| CTO Realty Growth |
| Real Estate |
CTO Realty and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and Real Estate
The main advantage of trading using opposite CTO Realty and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
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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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