Correlation Between Plaza Retail and Nexus Real
Can any of the company-specific risk be diversified away by investing in both Plaza Retail and Nexus Real 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 Plaza Retail and Nexus Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Retail REIT and Nexus Real Estate, you can compare the effects of market volatilities on Plaza Retail and Nexus Real 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 Plaza Retail with a short position of Nexus Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Nexus Real.
Diversification Opportunities for Plaza Retail and Nexus Real
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Plaza and Nexus is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Nexus Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexus Real Estate and Plaza Retail 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 Plaza Retail REIT are associated (or correlated) with Nexus Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexus Real Estate has no effect on the direction of Plaza Retail i.e., Plaza Retail and Nexus Real go up and down completely randomly.
Pair Corralation between Plaza Retail and Nexus Real
Assuming the 90 days horizon Plaza Retail REIT is expected to generate 0.47 times more return on investment than Nexus Real. However, Plaza Retail REIT is 2.14 times less risky than Nexus Real. It trades about -0.15 of its potential returns per unit of risk. Nexus Real Estate is currently generating about -0.32 per unit of risk. If you would invest 276.00 in Plaza Retail REIT on August 29, 2024 and sell it today you would lose (6.00) from holding Plaza Retail REIT or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Plaza Retail REIT vs. Nexus Real Estate
Performance |
| Timeline |
| Plaza Retail REIT |
| Nexus Real Estate |
Plaza Retail and Nexus Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Retail and Nexus Real
The main advantage of trading using opposite Plaza Retail and Nexus Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, Nexus Real 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 Nexus Real will offset losses from the drop in Nexus Real's long position.| Plaza Retail vs. Choice Properties Real | Plaza Retail vs. CT Real Estate | Plaza Retail vs. Firm Capital Property | Plaza Retail vs. Slate Grocery REIT |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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