Correlation Between Strategic Investments and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and Vastned Retail 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 Strategic Investments and Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Vastned Retail NV, you can compare the effects of market volatilities on Strategic Investments and Vastned Retail 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 Strategic Investments with a short position of Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Vastned Retail.
Diversification Opportunities for Strategic Investments and Vastned Retail
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Strategic and Vastned is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Strategic Investments i.e., Strategic Investments and Vastned Retail go up and down completely randomly.
Pair Corralation between Strategic Investments and Vastned Retail
Assuming the 90 days horizon Strategic Investments AS is expected to generate 3.35 times more return on investment than Vastned Retail. However, Strategic Investments is 3.35 times more volatile than Vastned Retail NV. It trades about 0.04 of its potential returns per unit of risk. Vastned Retail NV is currently generating about 0.08 per unit of risk. If you would invest 11.00 in Strategic Investments AS on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Strategic Investments AS or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Vastned Retail NV
Performance |
| Timeline |
| Strategic Investments |
| Vastned Retail NV |
Strategic Investments and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Vastned Retail
The main advantage of trading using opposite Strategic Investments and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Strategic Investments vs. The Bank of | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings |
| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Vicinity Centres | Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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