Correlation Between Plaza Retail and Phillips Edison

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

By analyzing existing cross correlation between Plaza Retail REIT and Phillips Edison Co, you can compare the effects of market volatilities on Plaza Retail and Phillips Edison 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 Plaza Retail with a short position of Phillips Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Phillips Edison.

Diversification Opportunities for Plaza Retail and Phillips Edison

-0.13

Correlation Coefficient

Plaza Retail  Phillips Edison

Good diversification

The 3 months correlation between Plaza and Phillips is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Phillips Edison Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips Edison and Plaza Retail 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 Plaza Retail REIT are associated (or correlated) with Phillips Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips Edison has no effect on the direction of Plaza Retail i.e., Plaza Retail and Phillips Edison go up and down completely randomly.

Pair Corralation between Plaza Retail and Phillips Edison

Assuming the 90 days horizon Plaza Retail REIT is expected to generate 1.32 times more return on investment than Phillips Edison. However, Plaza Retail is 1.32 times more volatile than Phillips Edison Co. It trades about 0.08 of its potential returns per unit of risk. Phillips Edison Co is currently generating about -0.09 per unit of risk. If you would invest  246.00  in Plaza Retail REIT on December 21, 2024 and sell it today you would earn a total of  16.00  from holding Plaza Retail REIT or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

Plaza Retail REIT  vs.  Phillips Edison Co

Plaza Retail REIT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Plaza Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Phillips Edison

Risk-Adjusted Performance

Very Weak

Over the last 90 days Phillips Edison Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Plaza Retail and Phillips Edison

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

The idea behind Plaza Retail REIT and Phillips Edison Co 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.