Correlation Between Mapletree Commercial and Realty Income
Can any of the company-specific risk be diversified away by investing in both Mapletree Commercial and Realty Income 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 Realty Income 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 Realty Income, you can compare the effects of market volatilities on Mapletree Commercial and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapletree Commercial and Realty Income.
Diversification Opportunities for Mapletree Commercial and Realty Income
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mapletree and Realty is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mapletree Commercial Trust and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Mapletree Commercial i.e., Mapletree Commercial and Realty Income go up and down completely randomly.
Pair Corralation between Mapletree Commercial and Realty Income
Assuming the 90 days horizon Mapletree Commercial Trust is expected to under-perform the Realty Income. In addition to that, Mapletree Commercial is 2.45 times more volatile than Realty Income. It trades about -0.22 of its total potential returns per unit of risk. Realty Income is currently generating about -0.16 per unit of volatility. If you would invest 5,664 in Realty Income on September 14, 2024 and sell it today you would lose (150.00) from holding Realty Income or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mapletree Commercial Trust vs. Realty Income
Performance |
| Timeline |
| Mapletree Commercial |
| Realty Income |
Mapletree Commercial and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapletree Commercial and Realty Income
The main advantage of trading using opposite Mapletree Commercial and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapletree Commercial position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income'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 |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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