Correlation Between Real Estate and Site Centers
Can any of the company-specific risk be diversified away by investing in both Real Estate and Site Centers 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 Real Estate and Site Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Real Estate and Site Centers Corp, you can compare the effects of market volatilities on Real Estate and Site Centers 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 Real Estate with a short position of Site Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Estate and Site Centers.
Diversification Opportunities for Real Estate and Site Centers
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Real and Site is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Real Estate and Site Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Site Centers Corp and Real Estate 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 The Real Estate are associated (or correlated) with Site Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Site Centers Corp has no effect on the direction of Real Estate i.e., Real Estate and Site Centers go up and down completely randomly.
Pair Corralation between Real Estate and Site Centers
Given the investment horizon of 90 days Real Estate is expected to generate 3.07 times less return on investment than Site Centers. But when comparing it to its historical volatility, The Real Estate is 2.22 times less risky than Site Centers. It trades about 0.05 of its potential returns per unit of risk. Site Centers Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 824.00 in Site Centers Corp on August 28, 2024 and sell it today you would earn a total of 776.00 from holding Site Centers Corp or generate 94.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Real Estate vs. Site Centers Corp
Performance |
| Timeline |
| Real Estate |
| Site Centers Corp |
Real Estate and Site Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Estate and Site Centers
The main advantage of trading using opposite Real Estate and Site Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate position performs unexpectedly, Site Centers 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 Site Centers will offset losses from the drop in Site Centers' long position.The idea behind The Real Estate and Site Centers Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Site Centers vs. Saul Centers | Site Centers vs. Acadia Realty Trust | Site Centers vs. Kite Realty Group | Site Centers vs. Retail Opportunity Investments |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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