Correlation Between Firm Capital and Saul Centers
Can any of the company-specific risk be diversified away by investing in both Firm Capital and Saul Centers 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 Firm Capital and Saul Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firm Capital Property and Saul Centers, you can compare the effects of market volatilities on Firm Capital and Saul Centers 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 Firm Capital with a short position of Saul Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firm Capital and Saul Centers.
Diversification Opportunities for Firm Capital and Saul Centers
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firm and Saul is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Firm Capital Property and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers and Firm Capital 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 Firm Capital Property are associated (or correlated) with Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of Firm Capital i.e., Firm Capital and Saul Centers go up and down completely randomly.
Pair Corralation between Firm Capital and Saul Centers
Assuming the 90 days horizon Firm Capital Property is expected to generate 37.42 times more return on investment than Saul Centers. However, Firm Capital is 37.42 times more volatile than Saul Centers. It trades about 0.06 of its potential returns per unit of risk. Saul Centers is currently generating about 0.05 per unit of risk. If you would invest 324.00 in Firm Capital Property on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Firm Capital Property or generate 26.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firm Capital Property vs. Saul Centers
Performance |
| Timeline |
| Firm Capital Property |
| Saul Centers |
Firm Capital and Saul Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firm Capital and Saul Centers
The main advantage of trading using opposite Firm Capital and Saul Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firm Capital position performs unexpectedly, Saul Centers 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 Saul Centers will offset losses from the drop in Saul Centers' long position.| Firm Capital vs. Global Net Lease, | Firm Capital vs. Brightspire Capital | Firm Capital vs. NexPoint Strategic Opportunities | Firm Capital vs. Aquagold International |
| Saul Centers vs. Saul Centers | Saul Centers vs. Braemar Hotels Resorts | Saul Centers vs. Armada Hoffler Properties |
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 Stocks Directory module to find actively traded stocks across global markets.
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