Correlation Between Fibra UNO and Highlands REIT
Can any of the company-specific risk be diversified away by investing in both Fibra UNO and Highlands REIT 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 Fibra UNO and Highlands REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fibra UNO and Highlands REIT, you can compare the effects of market volatilities on Fibra UNO and Highlands REIT 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 Fibra UNO with a short position of Highlands REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fibra UNO and Highlands REIT.
Diversification Opportunities for Fibra UNO and Highlands REIT
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fibra and Highlands is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fibra UNO and Highlands REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlands REIT and Fibra UNO 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 Fibra UNO are associated (or correlated) with Highlands REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlands REIT has no effect on the direction of Fibra UNO i.e., Fibra UNO and Highlands REIT go up and down completely randomly.
Pair Corralation between Fibra UNO and Highlands REIT
Assuming the 90 days horizon Fibra UNO is expected to under-perform the Highlands REIT. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fibra UNO is 38.65 times less risky than Highlands REIT. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Highlands REIT is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2.38 in Highlands REIT on August 25, 2024 and sell it today you would earn a total of 8.62 from holding Highlands REIT or generate 362.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.62% |
| Values | Daily Returns |
Fibra UNO vs. Highlands REIT
Performance |
| Timeline |
| Fibra UNO |
| Highlands REIT |
Fibra UNO and Highlands REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fibra UNO and Highlands REIT
The main advantage of trading using opposite Fibra UNO and Highlands REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fibra UNO position performs unexpectedly, Highlands REIT 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 Highlands REIT will offset losses from the drop in Highlands REIT's long position.| Fibra UNO vs. British Land | Fibra UNO vs. Global Net Lease, | Fibra UNO vs. VICI Properties | Fibra UNO vs. British Land |
| Highlands REIT vs. British Land | Highlands REIT vs. Presidio Property Trust | Highlands REIT vs. VICI Properties | Highlands REIT vs. W P Carey |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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