Correlation Between Mapletree Commercial and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Mapletree Commercial and Federal 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 Mapletree Commercial and Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapletree Commercial Trust and Federal Realty Investment, you can compare the effects of market volatilities on Mapletree Commercial and Federal 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 Mapletree Commercial with a short position of Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapletree Commercial and Federal Realty.
Diversification Opportunities for Mapletree Commercial and Federal Realty
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mapletree and Federal is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mapletree Commercial Trust and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment and Mapletree Commercial 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 Mapletree Commercial Trust are associated (or correlated) with Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Mapletree Commercial i.e., Mapletree Commercial and Federal Realty go up and down completely randomly.
Pair Corralation between Mapletree Commercial and Federal Realty
Assuming the 90 days horizon Mapletree Commercial Trust is expected to under-perform the Federal Realty. In addition to that, Mapletree Commercial is 2.36 times more volatile than Federal Realty Investment. It trades about -0.22 of its total potential returns per unit of risk. Federal Realty Investment is currently generating about -0.03 per unit of volatility. If you would invest 11,407 in Federal Realty Investment on September 14, 2024 and sell it today you would lose (59.00) from holding Federal Realty Investment or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mapletree Commercial Trust vs. Federal Realty Investment
Performance |
| Timeline |
| Mapletree Commercial |
| Federal Realty Investment |
Mapletree Commercial and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapletree Commercial and Federal Realty
The main advantage of trading using opposite Mapletree Commercial and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapletree Commercial position performs unexpectedly, Federal 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| Mapletree Commercial vs. Slate Grocery REIT | Mapletree Commercial vs. Seritage Growth Properties | Mapletree Commercial vs. Rithm Property Trust | Mapletree Commercial vs. Smart REIT |
| Federal Realty vs. Agree Realty | Federal Realty vs. Regency Centers | Federal Realty vs. Netstreit Corp | Federal Realty vs. Kimco Realty |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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