Correlation Between Stockland and Inland Real
Can any of the company-specific risk be diversified away by investing in both Stockland and Inland Real 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 Stockland and Inland Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stockland and Inland Real Estateome, you can compare the effects of market volatilities on Stockland and Inland Real 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 Stockland with a short position of Inland Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stockland and Inland Real.
Diversification Opportunities for Stockland and Inland Real
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stockland and Inland is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stockland and Inland Real Estateome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inland Real Estateome and Stockland 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 Stockland are associated (or correlated) with Inland Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inland Real Estateome has no effect on the direction of Stockland i.e., Stockland and Inland Real go up and down completely randomly.
Pair Corralation between Stockland and Inland Real
Assuming the 90 days horizon Stockland is expected to generate 1.8 times more return on investment than Inland Real. However, Stockland is 1.8 times more volatile than Inland Real Estateome. It trades about 0.05 of its potential returns per unit of risk. Inland Real Estateome is currently generating about 0.0 per unit of risk. If you would invest 243.00 in Stockland on August 26, 2024 and sell it today you would earn a total of 67.00 from holding Stockland or generate 27.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.58% |
| Values | Daily Returns |
Stockland vs. Inland Real Estateome
Performance |
| Timeline |
| Stockland |
| Inland Real Estateome |
Stockland and Inland Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stockland and Inland Real
The main advantage of trading using opposite Stockland and Inland Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stockland position performs unexpectedly, Inland Real 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 Inland Real will offset losses from the drop in Inland Real's long position.| Stockland vs. British Land | Stockland vs. Global Net Lease, | Stockland vs. VICI Properties | Stockland vs. Highlands REIT |
| Inland Real vs. Global Net Lease, | Inland Real vs. Brightspire Capital | Inland Real vs. NexPoint Strategic Opportunities |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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