Correlation Between Plaza Retail and 2028 Investment

Can any of the company-specific risk be diversified away by investing in both Plaza Retail and 2028 Investment 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 2028 Investment 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 2028 Investment Grade, you can compare the effects of market volatilities on Plaza Retail and 2028 Investment 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 2028 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and 2028 Investment.

Diversification Opportunities for Plaza Retail and 2028 Investment

0.48

Correlation Coefficient

Plaza Retail  2028 Investment

Very weak diversification

The 3 months correlation between Plaza and 2028 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and 2028 Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2028 Investment Grade 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 2028 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2028 Investment Grade has no effect on the direction of Plaza Retail i.e., Plaza Retail and 2028 Investment go up and down completely randomly.

Pair Corralation between Plaza Retail and 2028 Investment

Assuming the 90 days trading horizon Plaza Retail is expected to generate 1.21 times less return on investment than 2028 Investment. But when comparing it to its historical volatility, Plaza Retail REIT is 3.75 times less risky than 2028 Investment. It trades about 0.1 of its potential returns per unit of risk. 2028 Investment Grade is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,020  in 2028 Investment Grade on December 23, 2024 and sell it today you would earn a total of  33.00  from holding 2028 Investment Grade or generate 3.24% return on investment over 90 days.

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

Plaza Retail REIT  vs.  2028 Investment Grade

Plaza Retail REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Plaza Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

2028 Investment Grade

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 2028 Investment Grade are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, 2028 Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Plaza Retail and 2028 Investment

The main advantage of trading using opposite Plaza Retail and 2028 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, 2028 Investment 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 2028 Investment will offset losses from the drop in 2028 Investment's long position.

The idea behind Plaza Retail REIT and 2028 Investment Grade 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.