Correlation Between Plaza Retail and Doman Building
Can any of the company-specific risk be diversified away by investing in both Plaza Retail and Doman Building 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 Doman Building 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 Doman Building Materials, you can compare the effects of market volatilities on Plaza Retail and Doman Building 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 Doman Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Doman Building.
Diversification Opportunities for Plaza Retail and Doman Building
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Plaza and Doman is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Doman Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doman Building Materials 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 Doman Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doman Building Materials has no effect on the direction of Plaza Retail i.e., Plaza Retail and Doman Building go up and down completely randomly.
Pair Corralation between Plaza Retail and Doman Building
Assuming the 90 days trading horizon Plaza Retail REIT is expected to generate 0.64 times more return on investment than Doman Building. However, Plaza Retail REIT is 1.56 times less risky than Doman Building. It trades about 0.03 of its potential returns per unit of risk. Doman Building Materials is currently generating about -0.11 per unit of risk. If you would invest 347.00 in Plaza Retail REIT on January 13, 2025 and sell it today you would earn a total of 7.00 from holding Plaza Retail REIT or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Retail REIT vs. Doman Building Materials
Performance |
| Timeline |
| Plaza Retail REIT |
| Doman Building Materials |
Plaza Retail and Doman Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Retail and Doman Building
The main advantage of trading using opposite Plaza Retail and Doman Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, Doman Building 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 Doman Building will offset losses from the drop in Doman Building's long position.| Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. CT Real Estate | Plaza Retail vs. Choice Properties Real |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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