Correlation Between SmartCentres Real and Gulf Pacific
Can any of the company-specific risk be diversified away by investing in both SmartCentres Real and Gulf Pacific 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 SmartCentres Real and Gulf Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmartCentres Real Estate and Gulf Pacific Equities, you can compare the effects of market volatilities on SmartCentres Real and Gulf Pacific 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 SmartCentres Real with a short position of Gulf Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartCentres Real and Gulf Pacific.
Diversification Opportunities for SmartCentres Real and Gulf Pacific
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SmartCentres and Gulf is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SmartCentres Real Estate and Gulf Pacific Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Pacific Equities and SmartCentres 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 SmartCentres Real Estate are associated (or correlated) with Gulf Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Pacific Equities has no effect on the direction of SmartCentres Real i.e., SmartCentres Real and Gulf Pacific go up and down completely randomly.
Pair Corralation between SmartCentres Real and Gulf Pacific
Assuming the 90 days trading horizon SmartCentres Real is expected to generate 1.64 times less return on investment than Gulf Pacific. But when comparing it to its historical volatility, SmartCentres Real Estate is 1.08 times less risky than Gulf Pacific. It trades about 0.02 of its potential returns per unit of risk. Gulf Pacific Equities is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 39.00 in Gulf Pacific Equities on August 30, 2024 and sell it today you would earn a total of 6.00 from holding Gulf Pacific Equities or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SmartCentres Real Estate vs. Gulf Pacific Equities
Performance |
| Timeline |
| SmartCentres Real Estate |
| Gulf Pacific Equities |
SmartCentres Real and Gulf Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SmartCentres Real and Gulf Pacific
The main advantage of trading using opposite SmartCentres Real and Gulf Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartCentres Real position performs unexpectedly, Gulf Pacific 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 Gulf Pacific will offset losses from the drop in Gulf Pacific's long position.| SmartCentres Real vs. RioCan Real Estate | SmartCentres Real vs. NorthWest Healthcare Properties | SmartCentres Real vs. HR Real Estate | SmartCentres Real vs. Choice Properties Real |
| Gulf Pacific vs. SmartCentres Real Estate | Gulf Pacific vs. Dream Industrial Real | Gulf Pacific vs. RioCan Real Estate | Gulf Pacific vs. Algonquin Power Utilities |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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