Correlation Between Vastned Retail and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Retail Estates 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 Retail Estates 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 Retail Estates NV, you can compare the effects of market volatilities on Vastned Retail and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Retail Estates.
Diversification Opportunities for Vastned Retail and Retail Estates
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vastned and Retail is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Vastned Retail i.e., Vastned Retail and Retail Estates go up and down completely randomly.
Pair Corralation between Vastned Retail and Retail Estates
Assuming the 90 days horizon Vastned Retail NV is expected to generate 0.8 times more return on investment than Retail Estates. However, Vastned Retail NV is 1.26 times less risky than Retail Estates. It trades about -0.13 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.32 per unit of risk. If you would invest 2,440 in Vastned Retail NV on August 28, 2024 and sell it today you would lose (60.00) from holding Vastned Retail NV or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. Retail Estates NV
Performance |
| Timeline |
| Vastned Retail NV |
| Retail Estates NV |
Vastned Retail and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Retail Estates
The main advantage of trading using opposite Vastned Retail and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Vicinity Centres | Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI Holdings |
| Retail Estates vs. TRADEGATE | Retail Estates vs. UNITED UTILITIES GR | Retail Estates vs. United Utilities Group | Retail Estates vs. SIDETRADE EO 1 |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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