Correlation Between Concepcion Industrial and VistaREIT

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

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

Diversification Opportunities for Concepcion Industrial and VistaREIT

0.15

Correlation Coefficient

Concepcion Industrial  VistaREIT

Average diversification

The 3 months correlation between Concepcion and VistaREIT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and VistaREIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VistaREIT and Concepcion Industrial 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 Concepcion Industrial Corp are associated (or correlated) with VistaREIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VistaREIT has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and VistaREIT go up and down completely randomly.

Pair Corralation between Concepcion Industrial and VistaREIT

Assuming the 90 days trading horizon Concepcion Industrial is expected to generate 24.3 times less return on investment than VistaREIT. In addition to that, Concepcion Industrial is 2.81 times more volatile than VistaREIT. It trades about 0.0 of its total potential returns per unit of risk. VistaREIT is currently generating about 0.06 per unit of volatility. If you would invest  134.00  in VistaREIT on September 2, 2024 and sell it today you would earn a total of  45.00  from holding VistaREIT or generate 33.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.54%
Values	Daily Returns

Concepcion Industrial Corp  vs.  VistaREIT

Concepcion Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

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

VistaREIT

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VistaREIT are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, VistaREIT is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Concepcion Industrial and VistaREIT

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

The idea behind Concepcion Industrial Corp and VistaREIT 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.