Correlation Between VistaREIT and Araneta Properties
Can any of the company-specific risk be diversified away by investing in both VistaREIT and Araneta Properties 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 VistaREIT and Araneta Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VistaREIT and Araneta Properties, you can compare the effects of market volatilities on VistaREIT and Araneta Properties 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 VistaREIT with a short position of Araneta Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of VistaREIT and Araneta Properties.
Diversification Opportunities for VistaREIT and Araneta Properties
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VistaREIT and Araneta is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding VistaREIT and Araneta Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Araneta Properties and VistaREIT 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 VistaREIT are associated (or correlated) with Araneta Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Araneta Properties has no effect on the direction of VistaREIT i.e., VistaREIT and Araneta Properties go up and down completely randomly.
Pair Corralation between VistaREIT and Araneta Properties
Assuming the 90 days trading horizon VistaREIT is expected to generate 7.25 times less return on investment than Araneta Properties. But when comparing it to its historical volatility, VistaREIT is 1.76 times less risky than Araneta Properties. It trades about 0.06 of its potential returns per unit of risk. Araneta Properties is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Araneta Properties on October 21, 2024 and sell it today you would earn a total of 4.00 from holding Araneta Properties or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
VistaREIT vs. Araneta Properties
Performance |
| Timeline |
| VistaREIT |
| Araneta Properties |
VistaREIT and Araneta Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VistaREIT and Araneta Properties
The main advantage of trading using opposite VistaREIT and Araneta Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VistaREIT position performs unexpectedly, Araneta Properties 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 Araneta Properties will offset losses from the drop in Araneta Properties' long position.| VistaREIT vs. Bright Kindle Resources | VistaREIT vs. Philippine National Bank | VistaREIT vs. Atok Big Wedge | VistaREIT vs. ArthaLand Corp Preferred |
| Araneta Properties vs. Metropolitan Bank Trust | Araneta Properties vs. Crown Asia Chemicals | Araneta Properties vs. National Reinsurance | Araneta Properties vs. Prime Media Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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