Correlation Between Plaza Centers and Multi Retail
Can any of the company-specific risk be diversified away by investing in both Plaza Centers and Multi 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 Plaza Centers and Multi Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Centers NV and Multi Retail Group, you can compare the effects of market volatilities on Plaza Centers and Multi 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 Plaza Centers with a short position of Multi Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Centers and Multi Retail.
Diversification Opportunities for Plaza Centers and Multi Retail
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Plaza and Multi is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Centers NV and Multi Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Retail Group and Plaza Centers 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 Centers NV are associated (or correlated) with Multi Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Retail Group has no effect on the direction of Plaza Centers i.e., Plaza Centers and Multi Retail go up and down completely randomly.
Pair Corralation between Plaza Centers and Multi Retail
Assuming the 90 days trading horizon Plaza Centers NV is expected to generate 2.15 times more return on investment than Multi Retail. However, Plaza Centers is 2.15 times more volatile than Multi Retail Group. It trades about 0.03 of its potential returns per unit of risk. Multi Retail Group is currently generating about 0.01 per unit of risk. If you would invest 16,870 in Plaza Centers NV on November 27, 2024 and sell it today you would lose (2,880) from holding Plaza Centers NV or give up 17.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Centers NV vs. Multi Retail Group
Performance |
| Timeline |
| Plaza Centers NV |
| Multi Retail Group |
Plaza Centers and Multi Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Centers and Multi Retail
The main advantage of trading using opposite Plaza Centers and Multi Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Centers position performs unexpectedly, Multi 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 Multi Retail will offset losses from the drop in Multi Retail's long position.| Plaza Centers vs. Abra Information Technologies | Plaza Centers vs. Spuntech | Plaza Centers vs. Nrgene Technologies | Plaza Centers vs. WhiteSmoke Software |
| Multi Retail vs. Migdal Insurance | Multi Retail vs. Payment Financial Technologies | Multi Retail vs. Altshuler Shaham Financial | Multi Retail vs. Inrom Construction Industries |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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