Correlation Between British Land and Riocan REIT
Can any of the company-specific risk be diversified away by investing in both British Land and Riocan REIT 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 British Land and Riocan REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British Land and Riocan REIT, you can compare the effects of market volatilities on British Land and Riocan REIT 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 British Land with a short position of Riocan REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Land and Riocan REIT.
Diversification Opportunities for British Land and Riocan REIT
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between British and Riocan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding British Land and Riocan REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riocan REIT and British Land 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 British Land are associated (or correlated) with Riocan REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riocan REIT has no effect on the direction of British Land i.e., British Land and Riocan REIT go up and down completely randomly.
Pair Corralation between British Land and Riocan REIT
Assuming the 90 days horizon British Land is expected to generate 0.9 times more return on investment than Riocan REIT. However, British Land is 1.12 times less risky than Riocan REIT. It trades about -0.08 of its potential returns per unit of risk. Riocan REIT is currently generating about -0.12 per unit of risk. If you would invest 492.00 in British Land on January 26, 2024 and sell it today you would lose (13.00) from holding British Land or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
British Land vs. Riocan REIT
Performance |
| Timeline |
| British Land |
| Riocan REIT |
British Land and Riocan REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Land and Riocan REIT
The main advantage of trading using opposite British Land and Riocan REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Land position performs unexpectedly, Riocan REIT 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 REIT will offset losses from the drop in Riocan REIT's long position.| British Land vs. Global Net Lease | British Land vs. Brightspire Capital | British Land vs. NexPoint Strategic Opportunities | British Land vs. Aquagold International |
| Riocan REIT vs. Modiv Inc | Riocan REIT vs. Presidio Property Trust | Riocan REIT vs. Medalist Diversified Reit | Riocan REIT vs. Gladstone Commercial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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