Correlation Between SmartCentres Real and RioCan Real
Can any of the company-specific risk be diversified away by investing in both SmartCentres Real and RioCan Real 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 SmartCentres Real and RioCan Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SmartCentres Real Estate and RioCan Real Estate, you can compare the effects of market volatilities on SmartCentres Real and RioCan Real 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 SmartCentres Real with a short position of RioCan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartCentres Real and RioCan Real.
Diversification Opportunities for SmartCentres Real and RioCan Real
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SmartCentres and RioCan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SmartCentres Real Estate and RioCan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RioCan Real Estate and SmartCentres Real 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 SmartCentres Real Estate are associated (or correlated) with RioCan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RioCan Real Estate has no effect on the direction of SmartCentres Real i.e., SmartCentres Real and RioCan Real go up and down completely randomly.
Pair Corralation between SmartCentres Real and RioCan Real
Assuming the 90 days trading horizon SmartCentres Real Estate is expected to under-perform the RioCan Real. But the stock apears to be less risky and, when comparing its historical volatility, SmartCentres Real Estate is 1.28 times less risky than RioCan Real. The stock trades about -0.16 of its potential returns per unit of risk. The RioCan Real Estate is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,831 in RioCan Real Estate on January 20, 2024 and sell it today you would lose (60.00) from holding RioCan Real Estate or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SmartCentres Real Estate vs. RioCan Real Estate
Performance |
| Timeline |
| SmartCentres Real Estate |
| RioCan Real Estate |
SmartCentres Real and RioCan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SmartCentres Real and RioCan Real
The main advantage of trading using opposite SmartCentres Real and RioCan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SmartCentres Real position performs unexpectedly, RioCan Real 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 RioCan Real will offset losses from the drop in RioCan Real's long position.| SmartCentres Real vs. RioCan Real Estate | SmartCentres Real vs. NorthWest Healthcare Properties | SmartCentres Real vs. HR Real Estate | SmartCentres Real vs. Choice Properties Real |
| RioCan Real vs. SmartCentres Real Estate | RioCan Real vs. HR Real Estate | RioCan Real vs. Fortis Inc | RioCan Real vs. Enbridge |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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