Correlation Between Plaza Retail and T2 Metals
Can any of the company-specific risk be diversified away by investing in both Plaza Retail and T2 Metals 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 T2 Metals 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 T2 Metals Corp, you can compare the effects of market volatilities on Plaza Retail and T2 Metals 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 T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and T2 Metals.
Diversification Opportunities for Plaza Retail and T2 Metals
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Plaza and TWO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals Corp 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of Plaza Retail i.e., Plaza Retail and T2 Metals go up and down completely randomly.
Pair Corralation between Plaza Retail and T2 Metals
Assuming the 90 days trading horizon Plaza Retail REIT is expected to generate 0.36 times more return on investment than T2 Metals. However, Plaza Retail REIT is 2.77 times less risky than T2 Metals. It trades about -0.01 of its potential returns per unit of risk. T2 Metals Corp is currently generating about -0.29 per unit of risk. If you would invest 358.00 in Plaza Retail REIT on November 5, 2024 and sell it today you would lose (1.00) from holding Plaza Retail REIT or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza Retail REIT vs. T2 Metals Corp
Performance |
| Timeline |
| Plaza Retail REIT |
| T2 Metals Corp |
Plaza Retail and T2 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza Retail and T2 Metals
The main advantage of trading using opposite Plaza Retail and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, T2 Metals 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 T2 Metals will offset losses from the drop in T2 Metals' 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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