Correlation Between Pan American and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both Pan American and Plaza Retail 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 Pan American and Plaza Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Plaza Retail REIT, you can compare the effects of market volatilities on Pan American and Plaza Retail 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 Pan American with a short position of Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Plaza Retail.
Diversification Opportunities for Pan American and Plaza Retail
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and Plaza is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT and Pan American 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 Pan American Silver are associated (or correlated) with Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Pan American i.e., Pan American and Plaza Retail go up and down completely randomly.
Pair Corralation between Pan American and Plaza Retail
Assuming the 90 days trading horizon Pan American Silver is expected to generate 2.33 times more return on investment than Plaza Retail. However, Pan American is 2.33 times more volatile than Plaza Retail REIT. It trades about 0.13 of its potential returns per unit of risk. Plaza Retail REIT is currently generating about -0.05 per unit of risk. If you would invest 2,979 in Pan American Silver on October 24, 2024 and sell it today you would earn a total of 164.00 from holding Pan American Silver or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan American Silver vs. Plaza Retail REIT
Performance |
| Timeline |
| Pan American Silver |
| Plaza Retail REIT |
Pan American and Plaza Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan American and Plaza Retail
The main advantage of trading using opposite Pan American and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail's long position.| Pan American vs. Plaza Retail REIT | Pan American vs. Primaris Retail RE | Pan American vs. Northstar Clean Technologies | Pan American vs. Storage Vault Canada |
| Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. CT Real Estate | Plaza Retail vs. Choice Properties Real |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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