Correlation Between Rithm Property and Smart REIT
Can any of the company-specific risk be diversified away by investing in both Rithm Property and Smart REIT 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 Rithm Property and Smart REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rithm Property Trust and Smart REIT, you can compare the effects of market volatilities on Rithm Property and Smart REIT 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 Rithm Property with a short position of Smart REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Property and Smart REIT.
Diversification Opportunities for Rithm Property and Smart REIT
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rithm and Smart is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Property Trust and Smart REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart REIT and Rithm Property 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 Rithm Property Trust are associated (or correlated) with Smart REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart REIT has no effect on the direction of Rithm Property i.e., Rithm Property and Smart REIT go up and down completely randomly.
Pair Corralation between Rithm Property and Smart REIT
Considering the 90-day investment horizon Rithm Property Trust is expected to generate 2.89 times more return on investment than Smart REIT. However, Rithm Property is 2.89 times more volatile than Smart REIT. It trades about 0.07 of its potential returns per unit of risk. Smart REIT is currently generating about -0.05 per unit of risk. If you would invest 280.00 in Rithm Property Trust on October 20, 2024 and sell it today you would earn a total of 9.00 from holding Rithm Property Trust or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rithm Property Trust vs. Smart REIT
Performance |
| Timeline |
| Rithm Property Trust |
| Smart REIT |
Rithm Property and Smart REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Property and Smart REIT
The main advantage of trading using opposite Rithm Property and Smart REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Property position performs unexpectedly, Smart REIT 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 Smart REIT will offset losses from the drop in Smart REIT's long position.| Rithm Property vs. Urban Edge Properties | Rithm Property vs. Kite Realty Group | Rithm Property vs. Retail Opportunity Investments | Rithm Property vs. Inventrust Properties Corp |
| Smart REIT vs. Firm Capital Property | Smart REIT vs. Slate Grocery REIT | Smart REIT vs. Phillips Edison Co | Smart REIT vs. Choice Properties Real |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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