Correlation Between Retail Estates and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Vastned Retail 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 Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates and Vastned Retail Belgium, you can compare the effects of market volatilities on Retail Estates and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Vastned Retail.
Diversification Opportunities for Retail Estates and Vastned Retail
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Retail and Vastned is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Vastned Retail Belgium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail Belgium 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail Belgium has no effect on the direction of Retail Estates i.e., Retail Estates and Vastned Retail go up and down completely randomly.
Pair Corralation between Retail Estates and Vastned Retail
Assuming the 90 days trading horizon Retail Estates is expected to under-perform the Vastned Retail. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates is 1.14 times less risky than Vastned Retail. The stock trades about -0.27 of its potential returns per unit of risk. The Vastned Retail Belgium is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,988 in Vastned Retail Belgium on August 25, 2024 and sell it today you would lose (38.00) from holding Vastned Retail Belgium or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates vs. Vastned Retail Belgium
Performance |
| Timeline |
| Retail Estates |
| Vastned Retail Belgium |
Retail Estates and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Vastned Retail
The main advantage of trading using opposite Retail Estates and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Retail Estates vs. Cofinimmo SA | Retail Estates vs. Warehouses de Pauw | Retail Estates vs. Montea CVA | Retail Estates vs. Aedifica |
| Vastned Retail vs. Wereldhav B Sicafi | Vastned Retail vs. QRF SCA | Vastned Retail vs. Retail Estates | Vastned Retail vs. Home Invest Belgium |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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