Correlation Between Plaza Retail and Seritage Growth
Can any of the company-specific risk be diversified away by investing in both Plaza Retail and Seritage Growth 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 Seritage Growth 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 Seritage Growth Properties, you can compare the effects of market volatilities on Plaza Retail and Seritage Growth 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 Seritage Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Seritage Growth.
Diversification Opportunities for Plaza Retail and Seritage Growth
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plaza and Seritage is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Seritage Growth Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seritage Growth Prop 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 Seritage Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seritage Growth Prop has no effect on the direction of Plaza Retail i.e., Plaza Retail and Seritage Growth go up and down completely randomly.
Pair Corralation between Plaza Retail and Seritage Growth
Assuming the 90 days horizon Plaza Retail REIT is expected to under-perform the Seritage Growth. But the pink sheet apears to be less risky and, when comparing its historical volatility, Plaza Retail REIT is 1.62 times less risky than Seritage Growth. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Seritage Growth Properties is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,213 in Seritage Growth Properties on August 28, 2024 and sell it today you would lose (5.00) from holding Seritage Growth Properties or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Retail REIT vs. Seritage Growth Properties
Performance |
| Timeline |
| Plaza Retail REIT |
| Seritage Growth Prop |
Plaza Retail and Seritage Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Retail and Seritage Growth
The main advantage of trading using opposite Plaza Retail and Seritage Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, Seritage Growth 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 Seritage Growth will offset losses from the drop in Seritage Growth'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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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