Correlation Between Vastned Retail and MAGNA INTL
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and MAGNA INTL 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 Vastned Retail and MAGNA INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and MAGNA INTL, you can compare the effects of market volatilities on Vastned Retail and MAGNA INTL 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 Vastned Retail with a short position of MAGNA INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and MAGNA INTL.
Diversification Opportunities for Vastned Retail and MAGNA INTL
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vastned and MAGNA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and MAGNA INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNA INTL and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with MAGNA INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNA INTL has no effect on the direction of Vastned Retail i.e., Vastned Retail and MAGNA INTL go up and down completely randomly.
Pair Corralation between Vastned Retail and MAGNA INTL
Assuming the 90 days horizon Vastned Retail NV is expected to generate 0.71 times more return on investment than MAGNA INTL. However, Vastned Retail NV is 1.42 times less risky than MAGNA INTL. It trades about 0.06 of its potential returns per unit of risk. MAGNA INTL is currently generating about -0.01 per unit of risk. If you would invest 1,744 in Vastned Retail NV on September 4, 2024 and sell it today you would earn a total of 696.00 from holding Vastned Retail NV or generate 39.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vastned Retail NV vs. MAGNA INTL
Performance |
| Timeline |
| Vastned Retail NV |
| MAGNA INTL |
Vastned Retail and MAGNA INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and MAGNA INTL
The main advantage of trading using opposite Vastned Retail and MAGNA INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, MAGNA INTL 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 MAGNA INTL will offset losses from the drop in MAGNA INTL's long position.| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Link Real Estate | Vastned Retail vs. Kimco Realty | Vastned Retail vs. Range Resources Corp |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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