Correlation Between Phillips Edison and Highlands REIT
Can any of the company-specific risk be diversified away by investing in both Phillips Edison and Highlands 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 Phillips Edison and Highlands REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips Edison Co and Highlands REIT, you can compare the effects of market volatilities on Phillips Edison and Highlands 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 Phillips Edison with a short position of Highlands REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips Edison and Highlands REIT.
Diversification Opportunities for Phillips Edison and Highlands REIT
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Phillips and Highlands is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Phillips Edison Co and Highlands REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlands REIT and Phillips Edison 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 Phillips Edison Co are associated (or correlated) with Highlands REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlands REIT has no effect on the direction of Phillips Edison i.e., Phillips Edison and Highlands REIT go up and down completely randomly.
Pair Corralation between Phillips Edison and Highlands REIT
Given the investment horizon of 90 days Phillips Edison is expected to generate 124.85 times less return on investment than Highlands REIT. But when comparing it to its historical volatility, Phillips Edison Co is 149.6 times less risky than Highlands REIT. It trades about 0.32 of its potential returns per unit of risk. Highlands REIT is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 5.62 in Highlands REIT on August 25, 2024 and sell it today you would earn a total of 5.38 from holding Highlands REIT or generate 95.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phillips Edison Co vs. Highlands REIT
Performance |
| Timeline |
| Phillips Edison |
| Highlands REIT |
Phillips Edison and Highlands REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips Edison and Highlands REIT
The main advantage of trading using opposite Phillips Edison and Highlands REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips Edison position performs unexpectedly, Highlands 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 Highlands REIT will offset losses from the drop in Highlands REIT's long position.| Phillips Edison vs. Site Centers Corp | Phillips Edison vs. Retail Opportunity Investments | Phillips Edison vs. Urban Edge Properties | Phillips Edison vs. Netstreit Corp |
| Highlands REIT vs. British Land | Highlands REIT vs. Presidio Property Trust | Highlands REIT vs. VICI Properties | Highlands REIT vs. W P Carey |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |