Correlation Between Saul Centers and One Liberty

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

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

Diversification Opportunities for Saul Centers and One Liberty

0.52

Correlation Coefficient

Saul Centers  One Liberty

Very weak diversification

The 3 months correlation between Saul and One is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Saul Centers i.e., Saul Centers and One Liberty go up and down completely randomly.

Pair Corralation between Saul Centers and One Liberty

Considering the 90-day investment horizon Saul Centers is expected to generate 4.2 times less return on investment than One Liberty. But when comparing it to its historical volatility, Saul Centers is 1.2 times less risky than One Liberty. It trades about 0.05 of its potential returns per unit of risk. One Liberty Properties is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,605  in One Liberty Properties on September 1, 2024 and sell it today you would earn a total of  402.00  from holding One Liberty Properties or generate 15.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Saul Centers  vs.  One Liberty Properties

Saul Centers

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saul Centers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Saul Centers is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

One Liberty Properties

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One Liberty Properties are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, One Liberty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saul Centers and One Liberty

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

The idea behind Saul Centers and One Liberty Properties 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.