Correlation Between Smart REIT and Mapletree Commercial
Can any of the company-specific risk be diversified away by investing in both Smart REIT and Mapletree Commercial 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 Smart REIT and Mapletree Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart REIT and Mapletree Commercial Trust, you can compare the effects of market volatilities on Smart REIT and Mapletree Commercial 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 Smart REIT with a short position of Mapletree Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart REIT and Mapletree Commercial.
Diversification Opportunities for Smart REIT and Mapletree Commercial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Smart and Mapletree is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Smart REIT and Mapletree Commercial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Commercial and Smart REIT 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 Smart REIT are associated (or correlated) with Mapletree Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Commercial has no effect on the direction of Smart REIT i.e., Smart REIT and Mapletree Commercial go up and down completely randomly.
Pair Corralation between Smart REIT and Mapletree Commercial
Assuming the 90 days horizon Smart REIT is expected to generate 0.8 times more return on investment than Mapletree Commercial. However, Smart REIT is 1.25 times less risky than Mapletree Commercial. It trades about 0.04 of its potential returns per unit of risk. Mapletree Commercial Trust is currently generating about 0.02 per unit of risk. If you would invest 1,556 in Smart REIT on September 14, 2024 and sell it today you would earn a total of 268.00 from holding Smart REIT or generate 17.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.4% |
| Values | Daily Returns |
Smart REIT vs. Mapletree Commercial Trust
Performance |
| Timeline |
| Smart REIT |
| Mapletree Commercial |
Smart REIT and Mapletree Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart REIT and Mapletree Commercial
The main advantage of trading using opposite Smart REIT and Mapletree Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart REIT position performs unexpectedly, Mapletree Commercial 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 Mapletree Commercial will offset losses from the drop in Mapletree Commercial's long position.| Smart REIT vs. Firm Capital Property | Smart REIT vs. Slate Grocery REIT | Smart REIT vs. Phillips Edison Co | Smart REIT vs. Choice Properties Real |
| Mapletree Commercial vs. Slate Grocery REIT | Mapletree Commercial vs. Seritage Growth Properties | Mapletree Commercial vs. Rithm Property Trust | Mapletree Commercial vs. Smart REIT |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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