Correlation Between CT Real and Site Centers

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

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

Diversification Opportunities for CT Real and Site Centers

0.05

Correlation Coefficient

CT Real  Site Centers

Significant diversification

The 3 months correlation between CTRRF and Site is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CT Real Estate and Site Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Site Centers Corp and CT Real 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 CT Real Estate are associated (or correlated) with Site Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Site Centers Corp has no effect on the direction of CT Real i.e., CT Real and Site Centers go up and down completely randomly.

Pair Corralation between CT Real and Site Centers

Assuming the 90 days horizon CT Real is expected to generate 3.52 times less return on investment than Site Centers. But when comparing it to its historical volatility, CT Real Estate is 1.35 times less risky than Site Centers. It trades about 0.02 of its potential returns per unit of risk. Site Centers Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,028  in Site Centers Corp on September 13, 2024 and sell it today you would earn a total of  511.00  from holding Site Centers Corp or generate 49.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.08%
Values	Daily Returns

CT Real Estate  vs.  Site Centers Corp

CT Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CT Real Estate 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.

Site Centers Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Site Centers Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Site Centers exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CT Real and Site Centers

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

The idea behind CT Real Estate and Site Centers Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.