Correlation Between Power REIT and Virtus Real
Can any of the company-specific risk be diversified away by investing in both Power REIT and Virtus 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 Power REIT and Virtus Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Virtus Real Estate, you can compare the effects of market volatilities on Power REIT and Virtus 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 Power REIT with a short position of Virtus Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Virtus Real.
Diversification Opportunities for Power REIT and Virtus Real
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and Virtus is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT and Virtus Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Real Estate 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 Virtus Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Real Estate has no effect on the direction of Power REIT i.e., Power REIT and Virtus Real go up and down completely randomly.
Pair Corralation between Power REIT and Virtus Real
Allowing for the 90-day total investment horizon Power REIT is expected to generate 10.6 times more return on investment than Virtus Real. However, Power REIT is 10.6 times more volatile than Virtus Real Estate. It trades about 0.07 of its potential returns per unit of risk. Virtus Real Estate is currently generating about 0.11 per unit of risk. If you would invest 76.00 in Power REIT on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Power REIT or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power REIT vs. Virtus Real Estate
Performance |
| Timeline |
| Power REIT |
| Virtus Real Estate |
Power REIT and Virtus Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Virtus Real
The main advantage of trading using opposite Power REIT and Virtus Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT position performs unexpectedly, Virtus 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 Virtus Real will offset losses from the drop in Virtus Real's long position.| Power REIT vs. Newlake Capital Partners | Power REIT vs. Outfront Media | Power REIT vs. Uniti Group | Power REIT vs. Farmland Partners |
| Virtus Real vs. Realty Income | Virtus Real vs. Dynex Capital | Virtus Real vs. First Industrial Realty | Virtus Real vs. Healthcare Realty Trust |
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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