Correlation Between Highlands REIT and Mirvac
Can any of the company-specific risk be diversified away by investing in both Highlands REIT and Mirvac 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 Highlands REIT and Mirvac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlands REIT and Mirvac Group, you can compare the effects of market volatilities on Highlands REIT and Mirvac 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 Highlands REIT with a short position of Mirvac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlands REIT and Mirvac.
Diversification Opportunities for Highlands REIT and Mirvac
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highlands and Mirvac is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Highlands REIT and Mirvac Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirvac Group and Highlands 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 Highlands REIT are associated (or correlated) with Mirvac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirvac Group has no effect on the direction of Highlands REIT i.e., Highlands REIT and Mirvac go up and down completely randomly.
Pair Corralation between Highlands REIT and Mirvac
Given the investment horizon of 90 days Highlands REIT is expected to generate 192.67 times more return on investment than Mirvac. However, Highlands REIT is 192.67 times more volatile than Mirvac Group. It trades about 0.26 of its potential returns per unit of risk. Mirvac Group is currently generating about -0.04 per unit of risk. If you would invest 1.45 in Highlands REIT on September 1, 2024 and sell it today you would earn a total of 0.55 from holding Highlands REIT or generate 37.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Highlands REIT vs. Mirvac Group
Performance |
| Timeline |
| Highlands REIT |
| Mirvac Group |
Highlands REIT and Mirvac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlands REIT and Mirvac
The main advantage of trading using opposite Highlands REIT and Mirvac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlands REIT position performs unexpectedly, Mirvac 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 Mirvac will offset losses from the drop in Mirvac's long position.| Highlands REIT vs. British Land | Highlands REIT vs. Presidio Property Trust | Highlands REIT vs. VICI Properties | Highlands REIT vs. W P Carey |
| Mirvac vs. Digital Realty Trust | Mirvac vs. Alexandria Real Estate | Mirvac vs. Boston Properties | Mirvac vs. Vornado Realty Trust |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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