Correlation Between Primaris Retail and SmartCentres Real
Can any of the company-specific risk be diversified away by investing in both Primaris Retail and SmartCentres Real 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 SmartCentres Real 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 SmartCentres Real Estate, you can compare the effects of market volatilities on Primaris Retail and SmartCentres Real 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 SmartCentres Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and SmartCentres Real.
Diversification Opportunities for Primaris Retail and SmartCentres Real
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Primaris and SmartCentres is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and SmartCentres Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartCentres Real Estate 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 SmartCentres Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartCentres Real Estate has no effect on the direction of Primaris Retail i.e., Primaris Retail and SmartCentres Real go up and down completely randomly.
Pair Corralation between Primaris Retail and SmartCentres Real
Assuming the 90 days trading horizon Primaris Retail RE is expected to generate 1.21 times more return on investment than SmartCentres Real. However, Primaris Retail is 1.21 times more volatile than SmartCentres Real Estate. It trades about 0.15 of its potential returns per unit of risk. SmartCentres Real Estate is currently generating about 0.13 per unit of risk. If you would invest 1,305 in Primaris Retail RE on September 1, 2024 and sell it today you would earn a total of 307.00 from holding Primaris Retail RE or generate 23.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primaris Retail RE vs. SmartCentres Real Estate
Performance |
| Timeline |
| Primaris Retail RE |
| SmartCentres Real Estate |
Primaris Retail and SmartCentres Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primaris Retail and SmartCentres Real
The main advantage of trading using opposite Primaris Retail and SmartCentres Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail position performs unexpectedly, SmartCentres Real 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 SmartCentres Real will offset losses from the drop in SmartCentres Real's long position.| Primaris Retail vs. Slate Office REIT | Primaris Retail vs. Automotive Properties Real | Primaris Retail vs. BTB Real Estate | Primaris Retail vs. CT Real Estate |
| SmartCentres Real vs. RioCan Real Estate | SmartCentres Real vs. NorthWest Healthcare Properties | SmartCentres Real vs. HR Real Estate | SmartCentres Real vs. Choice Properties Real |
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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