Correlation Between Smart REIT and Retail Opportunity
Can any of the company-specific risk be diversified away by investing in both Smart REIT 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 Smart REIT and Retail Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart REIT and Retail Opportunity Investments, you can compare the effects of market volatilities on Smart REIT 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 Smart REIT with a short position of Retail Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart REIT and Retail Opportunity.
Diversification Opportunities for Smart REIT and Retail Opportunity
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smart and Retail is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Smart REIT and Retail Opportunity Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Opportunity 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 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 Smart REIT i.e., Smart REIT and Retail Opportunity go up and down completely randomly.
Pair Corralation between Smart REIT and Retail Opportunity
Assuming the 90 days horizon Smart REIT is expected to under-perform the Retail Opportunity. But the pink sheet apears to be less risky and, when comparing its historical volatility, Smart REIT is 1.9 times less risky than Retail Opportunity. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Retail Opportunity Investments is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,586 in Retail Opportunity Investments on August 25, 2024 and sell it today you would earn a total of 151.00 from holding Retail Opportunity Investments or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smart REIT vs. Retail Opportunity Investments
Performance |
| Timeline |
| Smart REIT |
| Retail Opportunity |
Smart REIT and Retail Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart REIT and Retail Opportunity
The main advantage of trading using opposite Smart REIT and Retail Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart REIT 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.| Smart REIT vs. Phillips Edison Co | Smart REIT vs. Simon Property Group | Smart REIT vs. Plaza Retail REIT | Smart REIT vs. Inventrust Properties Corp |
| Retail Opportunity vs. Federal Realty Investment | Retail Opportunity vs. Agree Realty | Retail Opportunity vs. Tanger Factory Outlet | Retail Opportunity vs. Netstreit 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |