Correlation Between Retail Opportunity and CBL Associates
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity and CBL Associates 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 CBL Associates 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 CBL Associates Properties, you can compare the effects of market volatilities on Retail Opportunity and CBL Associates 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 CBL Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and CBL Associates.
Diversification Opportunities for Retail Opportunity and CBL Associates
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retail and CBL is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and CBL Associates Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL Associates Properties 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 CBL Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL Associates Properties has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and CBL Associates go up and down completely randomly.
Pair Corralation between Retail Opportunity and CBL Associates
Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 1.87 times more return on investment than CBL Associates. However, Retail Opportunity is 1.87 times more volatile than CBL Associates Properties. It trades about 0.14 of its potential returns per unit of risk. CBL Associates Properties is currently generating about 0.22 per unit of risk. If you would invest 1,180 in Retail Opportunity Investments on August 23, 2024 and sell it today you would earn a total of 557.00 from holding Retail Opportunity Investments or generate 47.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Opportunity Investments vs. CBL Associates Properties
Performance |
| Timeline |
| Retail Opportunity |
| CBL Associates Properties |
Retail Opportunity and CBL Associates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and CBL Associates
The main advantage of trading using opposite Retail Opportunity and CBL Associates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity position performs unexpectedly, CBL Associates 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 CBL Associates will offset losses from the drop in CBL Associates' long position.| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
| CBL Associates vs. Kite Realty Group | CBL Associates vs. Site Centers Corp | CBL Associates vs. Urban Edge Properties | CBL Associates vs. Acadia Realty 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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