Correlation Between Plaza Retail and Medical Facilities
Can any of the company-specific risk be diversified away by investing in both Plaza Retail and Medical Facilities 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 Medical Facilities 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 Medical Facilities, you can compare the effects of market volatilities on Plaza Retail and Medical Facilities 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 Medical Facilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Medical Facilities.
Diversification Opportunities for Plaza Retail and Medical Facilities
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plaza and Medical is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Medical Facilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Facilities 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 Medical Facilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Facilities has no effect on the direction of Plaza Retail i.e., Plaza Retail and Medical Facilities go up and down completely randomly.
Pair Corralation between Plaza Retail and Medical Facilities
Assuming the 90 days trading horizon Plaza Retail is expected to generate 10.85 times less return on investment than Medical Facilities. But when comparing it to its historical volatility, Plaza Retail REIT is 1.46 times less risky than Medical Facilities. It trades about 0.02 of its potential returns per unit of risk. Medical Facilities is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 776.00 in Medical Facilities on September 2, 2024 and sell it today you would earn a total of 794.00 from holding Medical Facilities or generate 102.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Retail REIT vs. Medical Facilities
Performance |
| Timeline |
| Plaza Retail REIT |
| Medical Facilities |
Plaza Retail and Medical Facilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Retail and Medical Facilities
The main advantage of trading using opposite Plaza Retail and Medical Facilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, Medical Facilities 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 Medical Facilities will offset losses from the drop in Medical Facilities' long position.| Plaza Retail vs. Slate Office REIT | Plaza Retail vs. Automotive Properties Real | Plaza Retail vs. BTB Real Estate | Plaza Retail vs. CT Real Estate |
| Medical Facilities vs. Extendicare | Medical Facilities vs. Sienna Senior Living | Medical Facilities vs. Rogers Sugar | Medical Facilities vs. Chemtrade Logistics Income |
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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