Correlation Between Saul Centers and Smart REIT

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

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

Diversification Opportunities for Saul Centers and Smart REIT

0.81

Correlation Coefficient

Saul Centers  Smart REIT

Very poor diversification

The 3 months correlation between Saul and Smart is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and Smart REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart REIT and Saul Centers 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 Saul Centers are associated (or correlated) with Smart REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart REIT has no effect on the direction of Saul Centers i.e., Saul Centers and Smart REIT go up and down completely randomly.

Pair Corralation between Saul Centers and Smart REIT

Considering the 90-day investment horizon Saul Centers is expected to generate 33.22 times less return on investment than Smart REIT. But when comparing it to its historical volatility, Saul Centers is 2.06 times less risky than Smart REIT. It trades about 0.0 of its potential returns per unit of risk. Smart REIT is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,821  in Smart REIT on October 25, 2024 and sell it today you would lose (138.00) from holding Smart REIT or give up 7.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.57%
Values	Daily Returns

Saul Centers  vs.  Smart REIT

Saul Centers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saul Centers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Smart REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Saul Centers and Smart REIT

The main advantage of trading using opposite Saul Centers and Smart REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saul Centers position performs unexpectedly, Smart 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 Smart REIT will offset losses from the drop in Smart REIT's long position.

The idea behind Saul Centers and Smart REIT 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.