Correlation Between Power REIT and Re Max
Can any of the company-specific risk be diversified away by investing in both Power REIT and Re Max 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 Re Max into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Re Max Holding, you can compare the effects of market volatilities on Power REIT and Re Max 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 Re Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Re Max.
Diversification Opportunities for Power REIT and Re Max
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and RMAX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT and Re Max Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Re Max Holding 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 Re Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Re Max Holding has no effect on the direction of Power REIT i.e., Power REIT and Re Max go up and down completely randomly.
Pair Corralation between Power REIT and Re Max
Allowing for the 90-day total investment horizon Power REIT is expected to under-perform the Re Max. But the stock apears to be less risky and, when comparing its historical volatility, Power REIT is 1.06 times less risky than Re Max. The stock trades about -0.07 of its potential returns per unit of risk. The Re Max Holding is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,234 in Re Max Holding on August 27, 2024 and sell it today you would earn a total of 170.00 from holding Re Max Holding or generate 13.78% 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. Re Max Holding
Performance |
| Timeline |
| Power REIT |
| Re Max Holding |
Power REIT and Re Max Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Re Max
The main advantage of trading using opposite Power REIT and Re Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT position performs unexpectedly, Re Max 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 Re Max will offset losses from the drop in Re Max's long position.| Power REIT vs. Broadstone Net Lease | Power REIT vs. Armada Hflr Pr | Power REIT vs. Brightspire Capital | Power REIT vs. Safehold |
| Re Max vs. Investcorp Credit Management | Re Max vs. Medalist Diversified Reit | Re Max vs. Aquagold International | Re Max vs. Morningstar Unconstrained Allocation |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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