Correlation Between SEGRO Plc and Mapletree Industrial
Can any of the company-specific risk be diversified away by investing in both SEGRO Plc and Mapletree Industrial 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 SEGRO Plc and Mapletree Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEGRO Plc and Mapletree Industrial Trust, you can compare the effects of market volatilities on SEGRO Plc and Mapletree Industrial 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 SEGRO Plc with a short position of Mapletree Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEGRO Plc and Mapletree Industrial.
Diversification Opportunities for SEGRO Plc and Mapletree Industrial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEGRO and Mapletree is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SEGRO Plc and Mapletree Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Industrial and SEGRO Plc 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 SEGRO Plc are associated (or correlated) with Mapletree Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Industrial has no effect on the direction of SEGRO Plc i.e., SEGRO Plc and Mapletree Industrial go up and down completely randomly.
Pair Corralation between SEGRO Plc and Mapletree Industrial
Assuming the 90 days trading horizon SEGRO Plc is expected to under-perform the Mapletree Industrial. In addition to that, SEGRO Plc is 1.84 times more volatile than Mapletree Industrial Trust. It trades about -0.14 of its total potential returns per unit of risk. Mapletree Industrial Trust is currently generating about -0.11 per unit of volatility. If you would invest 161.00 in Mapletree Industrial Trust on August 28, 2024 and sell it today you would lose (4.00) from holding Mapletree Industrial Trust or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEGRO Plc vs. Mapletree Industrial Trust
Performance |
| Timeline |
| SEGRO Plc |
| Mapletree Industrial |
SEGRO Plc and Mapletree Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEGRO Plc and Mapletree Industrial
The main advantage of trading using opposite SEGRO Plc and Mapletree Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEGRO Plc position performs unexpectedly, Mapletree Industrial 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 Mapletree Industrial will offset losses from the drop in Mapletree Industrial's long position.The idea behind SEGRO Plc and Mapletree Industrial Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mapletree Industrial vs. PTT Global Chemical | Mapletree Industrial vs. CENTURIA OFFICE REIT | Mapletree Industrial vs. Sumitomo Chemical | Mapletree Industrial vs. Mitsui Chemicals |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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