Correlation Between Retail Estates and Peloton Interactive
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Peloton Interactive 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 Retail Estates and Peloton Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Peloton Interactive, you can compare the effects of market volatilities on Retail Estates and Peloton Interactive 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 Retail Estates with a short position of Peloton Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Peloton Interactive.
Diversification Opportunities for Retail Estates and Peloton Interactive
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Retail and Peloton is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and Peloton Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Interactive and Retail Estates 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 Retail Estates NV are associated (or correlated) with Peloton Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Interactive has no effect on the direction of Retail Estates i.e., Retail Estates and Peloton Interactive go up and down completely randomly.
Pair Corralation between Retail Estates and Peloton Interactive
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the Peloton Interactive. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 5.83 times less risky than Peloton Interactive. The stock trades about -0.01 of its potential returns per unit of risk. The Peloton Interactive is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 547.00 in Peloton Interactive on September 14, 2024 and sell it today you would earn a total of 385.00 from holding Peloton Interactive or generate 70.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Retail Estates NV vs. Peloton Interactive
Performance |
| Timeline |
| Retail Estates NV |
| Peloton Interactive |
Retail Estates and Peloton Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Peloton Interactive
The main advantage of trading using opposite Retail Estates and Peloton Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Peloton Interactive 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 Peloton Interactive will offset losses from the drop in Peloton Interactive's long position.| Retail Estates vs. Vicinity Centres | Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings | Retail Estates vs. SIVERS SEMICONDUCTORS AB |
| Peloton Interactive vs. ECHO INVESTMENT ZY | Peloton Interactive vs. SLR Investment Corp | Peloton Interactive vs. ASSOC BR FOODS | Peloton Interactive vs. Zoom Video Communications |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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