Correlation Between Primaris Retail and American Hotel
Can any of the company-specific risk be diversified away by investing in both Primaris Retail and American Hotel 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 Primaris Retail and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primaris Retail RE and American Hotel Income, you can compare the effects of market volatilities on Primaris Retail and American Hotel 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 Primaris Retail with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and American Hotel.
Diversification Opportunities for Primaris Retail and American Hotel
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Primaris and American is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and Primaris 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 Primaris Retail RE are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Primaris Retail i.e., Primaris Retail and American Hotel go up and down completely randomly.
Pair Corralation between Primaris Retail and American Hotel
Assuming the 90 days trading horizon Primaris Retail RE is expected to generate 0.43 times more return on investment than American Hotel. However, Primaris Retail RE is 2.33 times less risky than American Hotel. It trades about 0.23 of its potential returns per unit of risk. American Hotel Income is currently generating about -0.2 per unit of risk. If you would invest 1,453 in Primaris Retail RE on November 27, 2024 and sell it today you would earn a total of 90.00 from holding Primaris Retail RE or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primaris Retail RE vs. American Hotel Income
Performance |
| Timeline |
| Primaris Retail RE |
| American Hotel Income |
Primaris Retail and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primaris Retail and American Hotel
The main advantage of trading using opposite Primaris Retail and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Primaris Retail vs. HR Real Estate | Primaris Retail vs. Dream Office Real | Primaris Retail vs. Artis Real Estate | Primaris Retail vs. Boardwalk Real Estate |
| American Hotel vs. Applied Materials, | American Hotel vs. Nova Leap Health | American Hotel vs. Bird Construction | American Hotel vs. NeuPath Health |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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