Correlation Between InterRent Real and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both InterRent Real and Plaza 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 InterRent Real and Plaza Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InterRent Real Estate and Plaza Retail REIT, you can compare the effects of market volatilities on InterRent Real and Plaza 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 InterRent Real with a short position of Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterRent Real and Plaza Retail.
Diversification Opportunities for InterRent Real and Plaza Retail
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between InterRent and Plaza is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding InterRent Real Estate and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT and InterRent Real 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 InterRent Real Estate are associated (or correlated) with Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of InterRent Real i.e., InterRent Real and Plaza Retail go up and down completely randomly.
Pair Corralation between InterRent Real and Plaza Retail
Assuming the 90 days trading horizon InterRent Real Estate is expected to generate 2.2 times more return on investment than Plaza Retail. However, InterRent Real is 2.2 times more volatile than Plaza Retail REIT. It trades about -0.12 of its potential returns per unit of risk. Plaza Retail REIT is currently generating about -0.3 per unit of risk. If you would invest 1,082 in InterRent Real Estate on September 13, 2024 and sell it today you would lose (38.00) from holding InterRent Real Estate or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterRent Real Estate vs. Plaza Retail REIT
Performance |
| Timeline |
| InterRent Real Estate |
| Plaza Retail REIT |
InterRent Real and Plaza Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterRent Real and Plaza Retail
The main advantage of trading using opposite InterRent Real and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterRent Real position performs unexpectedly, Plaza 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 Plaza Retail will offset losses from the drop in Plaza Retail's long position.| InterRent Real vs. Canadian Apartment Properties | InterRent Real vs. Granite Real Estate | InterRent Real vs. Choice Properties Real | InterRent Real vs. HR Real Estate |
| Plaza Retail vs. Slate Office REIT | Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. iShares Canadian HYBrid |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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