Correlation Between Retail Opportunity and Macerich
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity and Macerich 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 Macerich 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 Macerich Company, you can compare the effects of market volatilities on Retail Opportunity and Macerich 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 Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Macerich.
Diversification Opportunities for Retail Opportunity and Macerich
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Retail and Macerich is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and Macerich Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich 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 Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and Macerich go up and down completely randomly.
Pair Corralation between Retail Opportunity and Macerich
Given the investment horizon of 90 days Retail Opportunity is expected to generate 2.69 times less return on investment than Macerich. But when comparing it to its historical volatility, Retail Opportunity Investments is 1.38 times less risky than Macerich. It trades about 0.03 of its potential returns per unit of risk. Macerich Company is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,145 in Macerich Company on August 29, 2024 and sell it today you would earn a total of 970.00 from holding Macerich Company or generate 84.72% 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. Macerich Company
Performance |
| Timeline |
| Retail Opportunity |
| Macerich |
Retail Opportunity and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and Macerich
The main advantage of trading using opposite Retail Opportunity and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Retail Opportunity vs. CBL Associates Properties | Retail Opportunity vs. Cedar Realty Trust | Retail Opportunity vs. Simon Property Group | Retail Opportunity vs. Realty Income |
| Macerich vs. CBL Associates Properties | Macerich vs. Cedar Realty Trust | Macerich vs. Simon Property Group | Macerich vs. Realty Income |
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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