Correlation Between Hammerson PLC and Warehouse REIT
Can any of the company-specific risk be diversified away by investing in both Hammerson PLC and Warehouse 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 Hammerson PLC and Warehouse REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hammerson PLC and Warehouse REIT plc, you can compare the effects of market volatilities on Hammerson PLC and Warehouse 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 Hammerson PLC with a short position of Warehouse REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hammerson PLC and Warehouse REIT.
Diversification Opportunities for Hammerson PLC and Warehouse REIT
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hammerson and Warehouse is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hammerson PLC and Warehouse REIT plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouse REIT plc and Hammerson PLC 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 Hammerson PLC are associated (or correlated) with Warehouse REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warehouse REIT plc has no effect on the direction of Hammerson PLC i.e., Hammerson PLC and Warehouse REIT go up and down completely randomly.
Pair Corralation between Hammerson PLC and Warehouse REIT
Assuming the 90 days trading horizon Hammerson PLC is expected to under-perform the Warehouse REIT. In addition to that, Hammerson PLC is 1.36 times more volatile than Warehouse REIT plc. It trades about -0.13 of its total potential returns per unit of risk. Warehouse REIT plc is currently generating about -0.02 per unit of volatility. If you would invest 8,790 in Warehouse REIT plc on August 30, 2024 and sell it today you would lose (110.00) from holding Warehouse REIT plc or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hammerson PLC vs. Warehouse REIT plc
Performance |
| Timeline |
| Hammerson PLC |
| Warehouse REIT plc |
Hammerson PLC and Warehouse REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hammerson PLC and Warehouse REIT
The main advantage of trading using opposite Hammerson PLC and Warehouse REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hammerson PLC position performs unexpectedly, Warehouse 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 Warehouse REIT will offset losses from the drop in Warehouse REIT's long position.| Hammerson PLC vs. Derwent London PLC | Hammerson PLC vs. Workspace Group PLC | Hammerson PLC vs. Supermarket Income REIT | Hammerson PLC vs. Games Workshop Group |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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