Correlation Between Mapletree Commercial and Retail Opportunity
Can any of the company-specific risk be diversified away by investing in both Mapletree Commercial and Retail Opportunity 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 Retail Opportunity 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 Retail Opportunity Investments, you can compare the effects of market volatilities on Mapletree Commercial and Retail Opportunity 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 Retail Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapletree Commercial and Retail Opportunity.
Diversification Opportunities for Mapletree Commercial and Retail Opportunity
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mapletree and Retail is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mapletree Commercial Trust and Retail Opportunity Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Opportunity 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 Retail Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Opportunity has no effect on the direction of Mapletree Commercial i.e., Mapletree Commercial and Retail Opportunity go up and down completely randomly.
Pair Corralation between Mapletree Commercial and Retail Opportunity
Assuming the 90 days horizon Mapletree Commercial Trust is expected to under-perform the Retail Opportunity. In addition to that, Mapletree Commercial is 25.05 times more volatile than Retail Opportunity Investments. It trades about -0.22 of its total potential returns per unit of risk. Retail Opportunity Investments is currently generating about 0.39 per unit of volatility. If you would invest 1,733 in Retail Opportunity Investments on September 14, 2024 and sell it today you would earn a total of 11.00 from holding Retail Opportunity Investments or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mapletree Commercial Trust vs. Retail Opportunity Investments
Performance |
| Timeline |
| Mapletree Commercial |
| Retail Opportunity |
Mapletree Commercial and Retail Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapletree Commercial and Retail Opportunity
The main advantage of trading using opposite Mapletree Commercial and Retail Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapletree Commercial position performs unexpectedly, Retail Opportunity 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 Retail Opportunity will offset losses from the drop in Retail Opportunity'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 |
| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Rithm Property Trust | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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