Correlation Between Realty Income and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Realty Income and Vastned Retail 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 Realty Income and Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and Vastned Retail NV, you can compare the effects of market volatilities on Realty Income and Vastned Retail 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 Realty Income with a short position of Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and Vastned Retail.
Diversification Opportunities for Realty Income and Vastned Retail
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Realty and Vastned is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV and Realty Income 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 Realty Income are associated (or correlated) with Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Realty Income i.e., Realty Income and Vastned Retail go up and down completely randomly.
Pair Corralation between Realty Income and Vastned Retail
Assuming the 90 days horizon Realty Income is expected to generate 1.07 times more return on investment than Vastned Retail. However, Realty Income is 1.07 times more volatile than Vastned Retail NV. It trades about -0.28 of its potential returns per unit of risk. Vastned Retail NV is currently generating about -0.31 per unit of risk. If you would invest 5,450 in Realty Income on September 24, 2024 and sell it today you would lose (361.00) from holding Realty Income or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realty Income vs. Vastned Retail NV
Performance |
| Timeline |
| Realty Income |
| Vastned Retail NV |
Realty Income and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and Vastned Retail
The main advantage of trading using opposite Realty Income and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Realty Income vs. Simon Property Group | Realty Income vs. Kimco Realty | Realty Income vs. Range Resources Corp | Realty Income vs. Klpierre SA |
| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Realty Income | Vastned Retail vs. Kimco Realty | Vastned Retail vs. Range Resources Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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