Correlation Between Retail Opportunity and Realty Income
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity and Realty Income 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 Realty Income 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 Realty Income, you can compare the effects of market volatilities on Retail Opportunity and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Realty Income.
Diversification Opportunities for Retail Opportunity and Realty Income
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Retail and Realty is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and Realty Income go up and down completely randomly.
Pair Corralation between Retail Opportunity and Realty Income
Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 1.56 times more return on investment than Realty Income. However, Retail Opportunity is 1.56 times more volatile than Realty Income. It trades about 0.22 of its potential returns per unit of risk. Realty Income is currently generating about -0.35 per unit of risk. If you would invest 1,589 in Retail Opportunity Investments on August 24, 2024 and sell it today you would earn a total of 149.00 from holding Retail Opportunity Investments or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Retail Opportunity Investments vs. Realty Income
Performance |
| Timeline |
| Retail Opportunity |
| Realty Income |
Retail Opportunity and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and Realty Income
The main advantage of trading using opposite Retail Opportunity and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| Retail Opportunity vs. Federal Realty Investment | Retail Opportunity vs. Agree Realty | Retail Opportunity vs. National Retail Properties | Retail Opportunity vs. Tanger Factory Outlet |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Agree Realty | Realty Income vs. National Retail Properties | Realty Income vs. Tanger Factory Outlet |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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