Correlation Between Retail Opportunity and Apple Hospitality
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity and Apple Hospitality 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 Opportunity and Apple Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Opportunity Investments and Apple Hospitality REIT, you can compare the effects of market volatilities on Retail Opportunity and Apple Hospitality 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 Opportunity with a short position of Apple Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Apple Hospitality.
Diversification Opportunities for Retail Opportunity and Apple Hospitality
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Retail and Apple is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and Apple Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Hospitality REIT and Retail Opportunity 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 Opportunity Investments are associated (or correlated) with Apple Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Hospitality REIT has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and Apple Hospitality go up and down completely randomly.
Pair Corralation between Retail Opportunity and Apple Hospitality
Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 1.76 times more return on investment than Apple Hospitality. However, Retail Opportunity is 1.76 times more volatile than Apple Hospitality REIT. It trades about 0.14 of its potential returns per unit of risk. Apple Hospitality REIT is currently generating about 0.08 per unit of risk. If you would invest 1,292 in Retail Opportunity Investments on August 27, 2024 and sell it today you would earn a total of 445.00 from holding Retail Opportunity Investments or generate 34.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Opportunity Investments vs. Apple Hospitality REIT
Performance |
| Timeline |
| Retail Opportunity |
| Apple Hospitality REIT |
Retail Opportunity and Apple Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and Apple Hospitality
The main advantage of trading using opposite Retail Opportunity and Apple Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity position performs unexpectedly, Apple Hospitality 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 Apple Hospitality will offset losses from the drop in Apple Hospitality's long position.| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
| Apple Hospitality vs. Park Hotels Resorts | Apple Hospitality vs. Diamondrock Hospitality | Apple Hospitality vs. Ryman Hospitality Properties | Apple Hospitality vs. Pebblebrook Hotel Trust |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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