Correlation Between Helios Fairfax and SmartCentres Real

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

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

Diversification Opportunities for Helios Fairfax and SmartCentres Real

0.4

Correlation Coefficient

Helios Fairfax  SmartCentres Real

Very weak diversification

The 3 months correlation between Helios and SmartCentres is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and SmartCentres Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartCentres Real Estate and Helios Fairfax 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 Helios Fairfax Partners are associated (or correlated) with SmartCentres Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartCentres Real Estate has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and SmartCentres Real go up and down completely randomly.

Pair Corralation between Helios Fairfax and SmartCentres Real

Assuming the 90 days trading horizon Helios Fairfax Partners is expected to under-perform the SmartCentres Real. In addition to that, Helios Fairfax is 5.27 times more volatile than SmartCentres Real Estate. It trades about -0.04 of its total potential returns per unit of risk. SmartCentres Real Estate is currently generating about -0.09 per unit of volatility. If you would invest  2,568  in SmartCentres Real Estate on October 15, 2024 and sell it today you would lose (127.00) from holding SmartCentres Real Estate or give up 4.95% of portfolio value over 90 days.

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

Helios Fairfax Partners  vs.  SmartCentres Real Estate

Helios Fairfax Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SmartCentres Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SmartCentres Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SmartCentres Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Helios Fairfax and SmartCentres Real

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

The idea behind Helios Fairfax Partners and SmartCentres 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 Commodity Directory module to find actively traded commodities issued by global exchanges.