Correlation Between Firm Capital and Site Centers

Can any of the company-specific risk be diversified away by investing in both Firm Capital 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 Firm Capital and Site Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Firm Capital Property and Site Centers Corp, you can compare the effects of market volatilities on Firm Capital 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 Firm Capital with a short position of Site Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firm Capital and Site Centers.

Diversification Opportunities for Firm Capital and Site Centers

-0.26

Correlation Coefficient

Firm Capital  Site Centers

Very good diversification

The 3 months correlation between Firm and Site is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Firm Capital Property 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 Firm Capital 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 Firm Capital Property 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 Firm Capital i.e., Firm Capital and Site Centers go up and down completely randomly.

Pair Corralation between Firm Capital and Site Centers

Assuming the 90 days horizon Firm Capital Property is expected to generate 1.31 times more return on investment than Site Centers. However, Firm Capital is 1.31 times more volatile than Site Centers Corp. It trades about 0.11 of its potential returns per unit of risk. Site Centers Corp is currently generating about 0.14 per unit of risk. If you would invest  351.00  in Firm Capital Property on February 15, 2024 and sell it today you would earn a total of  9.00  from holding Firm Capital Property or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Firm Capital Property  vs.  Site Centers Corp

Firm Capital Property

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Firm Capital Property are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Firm Capital is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Site Centers Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Site Centers Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Site Centers is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Firm Capital and Site Centers

The main advantage of trading using opposite Firm Capital and Site Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firm Capital 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 Firm Capital Property 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.