Correlation Between Maxus Realty and Saul Centers
Can any of the company-specific risk be diversified away by investing in both Maxus Realty and Saul Centers 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 Maxus Realty and Saul Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxus Realty Trust and Saul Centers, you can compare the effects of market volatilities on Maxus Realty and Saul Centers 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 Maxus Realty with a short position of Saul Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxus Realty and Saul Centers.
Diversification Opportunities for Maxus Realty and Saul Centers
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Maxus and Saul is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Maxus Realty Trust and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers and Maxus Realty 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 Maxus Realty Trust are associated (or correlated) with Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of Maxus Realty i.e., Maxus Realty and Saul Centers go up and down completely randomly.
Pair Corralation between Maxus Realty and Saul Centers
Given the investment horizon of 90 days Maxus Realty Trust is expected to generate 4.15 times more return on investment than Saul Centers. However, Maxus Realty is 4.15 times more volatile than Saul Centers. It trades about 0.01 of its potential returns per unit of risk. Saul Centers is currently generating about 0.02 per unit of risk. If you would invest 14,927 in Maxus Realty Trust on September 2, 2024 and sell it today you would lose (2,927) from holding Maxus Realty Trust or give up 19.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.05% |
| Values | Daily Returns |
Maxus Realty Trust vs. Saul Centers
Performance |
| Timeline |
| Maxus Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Saul Centers |
Maxus Realty and Saul Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maxus Realty and Saul Centers
The main advantage of trading using opposite Maxus Realty and Saul Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxus Realty position performs unexpectedly, Saul Centers 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 Saul Centers will offset losses from the drop in Saul Centers' long position.The idea behind Maxus Realty Trust and Saul Centers pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Saul Centers vs. Urban Edge Properties | Saul Centers vs. Site Centers Corp | Saul Centers vs. Kite Realty Group | Saul Centers 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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