Correlation Between Power REIT and Hudson Pacific
Can any of the company-specific risk be diversified away by investing in both Power REIT and Hudson Pacific 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 Power REIT and Hudson Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Hudson Pacific Properties, you can compare the effects of market volatilities on Power REIT and Hudson Pacific 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 Power REIT with a short position of Hudson Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Hudson Pacific.
Diversification Opportunities for Power REIT and Hudson Pacific
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and Hudson is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties and Power REIT 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 Power REIT are associated (or correlated) with Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Power REIT i.e., Power REIT and Hudson Pacific go up and down completely randomly.
Pair Corralation between Power REIT and Hudson Pacific
Allowing for the 90-day total investment horizon Power REIT is expected to generate 2.44 times more return on investment than Hudson Pacific. However, Power REIT is 2.44 times more volatile than Hudson Pacific Properties. It trades about 0.02 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about -0.03 per unit of risk. If you would invest 391.00 in Power REIT on September 24, 2024 and sell it today you would lose (267.00) from holding Power REIT or give up 68.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power REIT vs. Hudson Pacific Properties
Performance |
| Timeline |
| Power REIT |
| Hudson Pacific Properties |
Power REIT and Hudson Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Hudson Pacific
The main advantage of trading using opposite Power REIT and Hudson Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT position performs unexpectedly, Hudson Pacific 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 Hudson Pacific will offset losses from the drop in Hudson Pacific's long position.| Power REIT vs. Newlake Capital Partners | Power REIT vs. Uniti Group | Power REIT vs. EPR Properties | Power REIT vs. Digital Realty Trust |
| Hudson Pacific vs. Realty Income | Hudson Pacific vs. Park Hotels Resorts | Hudson Pacific vs. Power REIT | Hudson Pacific vs. Urban Edge Properties |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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