Correlation Between Outfront Media and Power REIT
Can any of the company-specific risk be diversified away by investing in both Outfront Media and Power REIT 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 Outfront Media and Power REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outfront Media and Power REIT, you can compare the effects of market volatilities on Outfront Media and Power REIT 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 Outfront Media with a short position of Power REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outfront Media and Power REIT.
Diversification Opportunities for Outfront Media and Power REIT
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Outfront and Power is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Outfront Media and Power REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power REIT and Outfront Media 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 Outfront Media are associated (or correlated) with Power REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power REIT has no effect on the direction of Outfront Media i.e., Outfront Media and Power REIT go up and down completely randomly.
Pair Corralation between Outfront Media and Power REIT
Considering the 90-day investment horizon Outfront Media is expected to generate 0.31 times more return on investment than Power REIT. However, Outfront Media is 3.22 times less risky than Power REIT. It trades about 0.16 of its potential returns per unit of risk. Power REIT is currently generating about -0.08 per unit of risk. If you would invest 1,788 in Outfront Media on August 23, 2024 and sell it today you would earn a total of 89.00 from holding Outfront Media or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outfront Media vs. Power REIT
Performance |
| Timeline |
| Outfront Media |
| Power REIT |
Outfront Media and Power REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outfront Media and Power REIT
The main advantage of trading using opposite Outfront Media and Power REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outfront Media position performs unexpectedly, Power REIT 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 Power REIT will offset losses from the drop in Power REIT's long position.| Outfront Media vs. PotlatchDeltic Corp | Outfront Media vs. Gaming Leisure Properties | Outfront Media vs. Rayonier | Outfront Media vs. Weyerhaeuser |
| Power REIT vs. Newlake Capital Partners | Power REIT vs. Outfront Media | Power REIT vs. Uniti Group | Power REIT vs. Farmland Partners |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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