Correlation Between Maiden Holdings and Sila Realty
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings and Sila Realty 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 Maiden Holdings and Sila Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Sila Realty Trust,, you can compare the effects of market volatilities on Maiden Holdings and Sila Realty 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 Maiden Holdings with a short position of Sila Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Sila Realty.
Diversification Opportunities for Maiden Holdings and Sila Realty
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Maiden and Sila is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Sila Realty Trust, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sila Realty Trust, and Maiden Holdings 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 Maiden Holdings are associated (or correlated) with Sila Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sila Realty Trust, has no effect on the direction of Maiden Holdings i.e., Maiden Holdings and Sila Realty go up and down completely randomly.
Pair Corralation between Maiden Holdings and Sila Realty
Given the investment horizon of 90 days Maiden Holdings is expected to generate 5.66 times less return on investment than Sila Realty. But when comparing it to its historical volatility, Maiden Holdings is 1.39 times less risky than Sila Realty. It trades about 0.03 of its potential returns per unit of risk. Sila Realty Trust, is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,524 in Sila Realty Trust, on August 30, 2024 and sell it today you would earn a total of 103.00 from holding Sila Realty Trust, or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings vs. Sila Realty Trust,
Performance |
| Timeline |
| Maiden Holdings |
| Sila Realty Trust, |
Maiden Holdings and Sila Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Sila Realty
The main advantage of trading using opposite Maiden Holdings and Sila Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings position performs unexpectedly, Sila Realty 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 Sila Realty will offset losses from the drop in Sila Realty's long position.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
| Sila Realty vs. Northstar Clean Technologies | Sila Realty vs. Asure Software | Sila Realty vs. United Guardian | Sila Realty vs. Old Dominion Freight |
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.
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