Correlation Between Vastned Retail and PACCAR
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and PACCAR 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 PACCAR 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 PACCAR Inc, you can compare the effects of market volatilities on Vastned Retail and PACCAR 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 PACCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and PACCAR.
Diversification Opportunities for Vastned Retail and PACCAR
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vastned and PACCAR is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and PACCAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACCAR Inc 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 PACCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACCAR Inc has no effect on the direction of Vastned Retail i.e., Vastned Retail and PACCAR go up and down completely randomly.
Pair Corralation between Vastned Retail and PACCAR
Assuming the 90 days horizon Vastned Retail NV is expected to under-perform the PACCAR. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 2.1 times less risky than PACCAR. The stock trades about -0.02 of its potential returns per unit of risk. The PACCAR Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,142 in PACCAR Inc on September 27, 2024 and sell it today you would earn a total of 898.00 from holding PACCAR Inc or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. PACCAR Inc
Performance |
| Timeline |
| Vastned Retail NV |
| PACCAR Inc |
Vastned Retail and PACCAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and PACCAR
The main advantage of trading using opposite Vastned Retail and PACCAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, PACCAR 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 PACCAR will offset losses from the drop in PACCAR's long position.| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Realty Income | Vastned Retail vs. Kimco Realty | Vastned Retail vs. Range Resources Corp |
| PACCAR vs. Quaker Chemical | PACCAR vs. Fast Retailing Co | PACCAR vs. Silicon Motion Technology | PACCAR vs. Vastned Retail NV |
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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