Correlation Between Retail Estates and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on Retail Estates and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Postal Savings.
Diversification Opportunities for Retail Estates and Postal Savings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Retail and Postal is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Retail Estates i.e., Retail Estates and Postal Savings go up and down completely randomly.
Pair Corralation between Retail Estates and Postal Savings
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the Postal Savings. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 1.78 times less risky than Postal Savings. The stock trades about -0.28 of its potential returns per unit of risk. The Postal Savings Bank is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Postal Savings Bank on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Postal Savings Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Retail Estates NV vs. Postal Savings Bank
Performance |
| Timeline |
| Retail Estates NV |
| Postal Savings Bank |
Retail Estates and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Postal Savings
The main advantage of trading using opposite Retail Estates and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Retail Estates vs. Simon Property Group | Retail Estates vs. Realty Income | Retail Estates vs. Kimco Realty | Retail Estates vs. Range Resources Corp |
| Postal Savings vs. Perdoceo Education | Postal Savings vs. STRAYER EDUCATION | Postal Savings vs. Costco Wholesale Corp | Postal Savings vs. Tsingtao Brewery |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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