Correlation Between Keppel REIT and Allied Properties
Can any of the company-specific risk be diversified away by investing in both Keppel REIT and Allied Properties 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 Keppel REIT and Allied Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keppel REIT and Allied Properties Real, you can compare the effects of market volatilities on Keppel REIT and Allied Properties 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 Keppel REIT with a short position of Allied Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keppel REIT and Allied Properties.
Diversification Opportunities for Keppel REIT and Allied Properties
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Keppel and Allied is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Keppel REIT and Allied Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Properties Real and Keppel 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 Keppel REIT are associated (or correlated) with Allied Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Properties Real has no effect on the direction of Keppel REIT i.e., Keppel REIT and Allied Properties go up and down completely randomly.
Pair Corralation between Keppel REIT and Allied Properties
Assuming the 90 days horizon Keppel REIT is expected to generate 1.88 times less return on investment than Allied Properties. But when comparing it to its historical volatility, Keppel REIT is 1.35 times less risky than Allied Properties. It trades about 0.01 of its potential returns per unit of risk. Allied Properties Real is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,749 in Allied Properties Real on November 5, 2024 and sell it today you would lose (548.00) from holding Allied Properties Real or give up 31.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.62% |
| Values | Daily Returns |
Keppel REIT vs. Allied Properties Real
Performance |
| Timeline |
| Keppel REIT |
| Allied Properties Real |
Keppel REIT and Allied Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keppel REIT and Allied Properties
The main advantage of trading using opposite Keppel REIT and Allied Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keppel REIT position performs unexpectedly, Allied Properties 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 Allied Properties will offset losses from the drop in Allied Properties' long position.| Keppel REIT vs. Cousins Properties Incorporated | Keppel REIT vs. Highwoods Properties | Keppel REIT vs. Douglas Emmett | Keppel REIT vs. Equity Commonwealth |
| Allied Properties vs. Slate Office REIT | Allied Properties vs. Keppel REIT | Allied Properties vs. BTB Real Estate | Allied Properties vs. Franklin Street 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |