Correlation Between Retail Opportunity and Firm Capital
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity and Firm Capital 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 Firm Capital 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 Firm Capital Property, you can compare the effects of market volatilities on Retail Opportunity and Firm Capital 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 Firm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Firm Capital.
Diversification Opportunities for Retail Opportunity and Firm Capital
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Retail and Firm is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and Firm Capital Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firm Capital Property 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 Firm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firm Capital Property has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and Firm Capital go up and down completely randomly.
Pair Corralation between Retail Opportunity and Firm Capital
Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 2.1 times more return on investment than Firm Capital. However, Retail Opportunity is 2.1 times more volatile than Firm Capital Property. It trades about 0.26 of its potential returns per unit of risk. Firm Capital Property is currently generating about -0.03 per unit of risk. If you would invest 1,566 in Retail Opportunity Investments on August 28, 2024 and sell it today you would earn a total of 175.00 from holding Retail Opportunity Investments or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Retail Opportunity Investments vs. Firm Capital Property
Performance |
| Timeline |
| Retail Opportunity |
| Firm Capital Property |
Retail Opportunity and Firm Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and Firm Capital
The main advantage of trading using opposite Retail Opportunity and Firm Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity position performs unexpectedly, Firm Capital 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 Firm Capital will offset losses from the drop in Firm Capital's long position.| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
| Firm Capital vs. Global Net Lease, | Firm Capital vs. VICI Properties | Firm Capital vs. Highlands REIT | Firm Capital vs. W P Carey |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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