Correlation Between Retail Estates and PLAY2CHILL
Can any of the company-specific risk be diversified away by investing in both Retail Estates and PLAY2CHILL 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 PLAY2CHILL 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 PLAY2CHILL SA ZY, you can compare the effects of market volatilities on Retail Estates and PLAY2CHILL 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 PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and PLAY2CHILL.
Diversification Opportunities for Retail Estates and PLAY2CHILL
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Retail and PLAY2CHILL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY 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 PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of Retail Estates i.e., Retail Estates and PLAY2CHILL go up and down completely randomly.
Pair Corralation between Retail Estates and PLAY2CHILL
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the PLAY2CHILL. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 3.01 times less risky than PLAY2CHILL. The stock trades about -0.11 of its potential returns per unit of risk. The PLAY2CHILL SA ZY is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 80.00 in PLAY2CHILL SA ZY on October 1, 2024 and sell it today you would earn a total of 1.00 from holding PLAY2CHILL SA ZY or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. PLAY2CHILL SA ZY
Performance |
| Timeline |
| Retail Estates NV |
| PLAY2CHILL SA ZY |
Retail Estates and PLAY2CHILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and PLAY2CHILL
The main advantage of trading using opposite Retail Estates and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.| Retail Estates vs. Simon Property Group | Retail Estates vs. Kimco Realty | Retail Estates vs. Brixmor Property Group | Retail Estates vs. Vicinity Centres |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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