Correlation Between Centerspace and InterRent Real

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

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

Diversification Opportunities for Centerspace and InterRent Real

0.27

Correlation Coefficient

Centerspace  InterRent Real

Modest diversification

The 3 months correlation between Centerspace and InterRent is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Centerspace and InterRent Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterRent Real Estate and Centerspace 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 Centerspace are associated (or correlated) with InterRent Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterRent Real Estate has no effect on the direction of Centerspace i.e., Centerspace and InterRent Real go up and down completely randomly.

Pair Corralation between Centerspace and InterRent Real

Considering the 90-day investment horizon Centerspace is expected to under-perform the InterRent Real. In addition to that, Centerspace is 1.63 times more volatile than InterRent Real Estate. It trades about -0.35 of its total potential returns per unit of risk. InterRent Real Estate is currently generating about -0.26 per unit of volatility. If you would invest  748.00  in InterRent Real Estate on October 9, 2024 and sell it today you would lose (37.00) from holding InterRent Real Estate or give up 4.95% of portfolio value over 90 days.

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

Centerspace  vs.  InterRent Real Estate

Centerspace

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centerspace has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

InterRent Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days InterRent Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Centerspace and InterRent Real

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

The idea behind Centerspace and InterRent Real Estate 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.