Correlation Between Retail Estates and Immolease Trust
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Immolease Trust 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 Immolease Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates and Immolease Trust NV, you can compare the effects of market volatilities on Retail Estates and Immolease Trust 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 Immolease Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Immolease Trust.
Diversification Opportunities for Retail Estates and Immolease Trust
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Retail and Immolease is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Immolease Trust NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immolease Trust NV 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 are associated (or correlated) with Immolease Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immolease Trust NV has no effect on the direction of Retail Estates i.e., Retail Estates and Immolease Trust go up and down completely randomly.
Pair Corralation between Retail Estates and Immolease Trust
Assuming the 90 days trading horizon Retail Estates is expected to generate 1.62 times more return on investment than Immolease Trust. However, Retail Estates is 1.62 times more volatile than Immolease Trust NV. It trades about -0.1 of its potential returns per unit of risk. Immolease Trust NV is currently generating about -0.5 per unit of risk. If you would invest 5,920 in Retail Estates on November 4, 2024 and sell it today you would lose (170.00) from holding Retail Estates or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 81.82% |
| Values | Daily Returns |
Retail Estates vs. Immolease Trust NV
Performance |
| Timeline |
| Retail Estates |
| Immolease Trust NV |
Retail Estates and Immolease Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Immolease Trust
The main advantage of trading using opposite Retail Estates and Immolease Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Immolease Trust 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 Immolease Trust will offset losses from the drop in Immolease Trust's long position.| Retail Estates vs. Cofinimmo SA | Retail Estates vs. Warehouses de Pauw | Retail Estates vs. Montea CVA | Retail Estates vs. Aedifica |
| Immolease Trust vs. Immobiliere Distri Land NV | Immolease Trust vs. Immobel | Immolease Trust vs. Accentis |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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