Correlation Between Sella Real and Reit 1
Can any of the company-specific risk be diversified away by investing in both Sella Real and Reit 1 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 Sella Real and Reit 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sella Real Estate and Reit 1, you can compare the effects of market volatilities on Sella Real and Reit 1 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 Sella Real with a short position of Reit 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sella Real and Reit 1.
Diversification Opportunities for Sella Real and Reit 1
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sella and Reit is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sella Real Estate and Reit 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reit 1 and Sella Real 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 Sella Real Estate are associated (or correlated) with Reit 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reit 1 has no effect on the direction of Sella Real i.e., Sella Real and Reit 1 go up and down completely randomly.
Pair Corralation between Sella Real and Reit 1
Assuming the 90 days trading horizon Sella Real Estate is expected to generate 0.97 times more return on investment than Reit 1. However, Sella Real Estate is 1.03 times less risky than Reit 1. It trades about -0.12 of its potential returns per unit of risk. Reit 1 is currently generating about -0.14 per unit of risk. If you would invest 97,000 in Sella Real Estate on November 5, 2024 and sell it today you would lose (2,960) from holding Sella Real Estate or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sella Real Estate vs. Reit 1
Performance |
| Timeline |
| Sella Real Estate |
| Reit 1 |
Sella Real and Reit 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sella Real and Reit 1
The main advantage of trading using opposite Sella Real and Reit 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sella Real position performs unexpectedly, Reit 1 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 Reit 1 will offset losses from the drop in Reit 1's long position.| Sella Real vs. Reit 1 | Sella Real vs. Bank Hapoalim | Sella Real vs. Azrieli Group | Sella Real vs. Amot Investments |
| Reit 1 vs. Sella Real Estate | Reit 1 vs. Alony Hetz Properties | Reit 1 vs. Azrieli Group | Reit 1 vs. Amot Investments |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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