Correlation Between Saul Centers and Firm Capital

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

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

Diversification Opportunities for Saul Centers and Firm Capital

0.64

Correlation Coefficient

Saul Centers  Firm Capital

Poor diversification

The 3 months correlation between Saul and Firm is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and Firm Capital Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firm Capital Property 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 Firm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firm Capital Property has no effect on the direction of Saul Centers i.e., Saul Centers and Firm Capital go up and down completely randomly.

Pair Corralation between Saul Centers and Firm Capital

Considering the 90-day investment horizon Saul Centers is expected to under-perform the Firm Capital. But the stock apears to be less risky and, when comparing its historical volatility, Saul Centers is 1.19 times less risky than Firm Capital. The stock trades about -0.21 of its potential returns per unit of risk. The Firm Capital Property is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  419.00  in Firm Capital Property on October 25, 2024 and sell it today you would lose (34.00) from holding Firm Capital Property or give up 8.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.86%
Values	Daily Returns

Saul Centers  vs.  Firm Capital Property

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.

Firm Capital Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Firm Capital Property 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 Firm Capital

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

The idea behind Saul Centers and Firm Capital Property 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.