Correlation Between Retail Estates and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both Retail Estates and VARIOUS EATERIES 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS, you can compare the effects of market volatilities on Retail Estates and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and VARIOUS EATERIES.
Diversification Opportunities for Retail Estates and VARIOUS EATERIES
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Retail and VARIOUS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Retail Estates i.e., Retail Estates and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between Retail Estates and VARIOUS EATERIES
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the VARIOUS EATERIES. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 1.04 times less risky than VARIOUS EATERIES. The stock trades about -0.22 of its potential returns per unit of risk. The VARIOUS EATERIES LS is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 20.00 in VARIOUS EATERIES LS on September 1, 2024 and sell it today you would earn a total of 1.00 from holding VARIOUS EATERIES LS or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| Retail Estates NV |
| VARIOUS EATERIES |
Retail Estates and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and VARIOUS EATERIES
The main advantage of trading using opposite Retail Estates and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings | Retail Estates vs. Origin Agritech | Retail Estates vs. SIVERS SEMICONDUCTORS AB |
| VARIOUS EATERIES vs. USWE SPORTS AB | VARIOUS EATERIES vs. Fukuyama Transporting Co | VARIOUS EATERIES vs. Transport International Holdings | VARIOUS EATERIES vs. NetSol Technologies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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