Correlation Between Choice Properties and Smart REIT
Can any of the company-specific risk be diversified away by investing in both Choice Properties and Smart REIT 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 Choice Properties and Smart REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Properties Real and Smart REIT, you can compare the effects of market volatilities on Choice Properties and Smart REIT 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 Choice Properties with a short position of Smart REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Properties and Smart REIT.
Diversification Opportunities for Choice Properties and Smart REIT
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Choice and Smart is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Choice Properties Real and Smart REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart REIT and Choice Properties 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 Choice Properties Real are associated (or correlated) with Smart REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart REIT has no effect on the direction of Choice Properties i.e., Choice Properties and Smart REIT go up and down completely randomly.
Pair Corralation between Choice Properties and Smart REIT
Assuming the 90 days horizon Choice Properties Real is expected to generate 3.49 times more return on investment than Smart REIT. However, Choice Properties is 3.49 times more volatile than Smart REIT. It trades about 0.16 of its potential returns per unit of risk. Smart REIT is currently generating about 0.06 per unit of risk. If you would invest 690.00 in Choice Properties Real on December 28, 2024 and sell it today you would earn a total of 279.00 from holding Choice Properties Real or generate 40.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 90.0% |
Values | Daily Returns |
Choice Properties Real vs. Smart REIT
Performance |
Timeline |
Choice Properties Real |
Smart REIT |
Choice Properties and Smart REIT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Choice Properties and Smart REIT
The main advantage of trading using opposite Choice Properties and Smart REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Properties position performs unexpectedly, Smart REIT 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 Smart REIT will offset losses from the drop in Smart REIT's long position.Choice Properties vs. Smart REIT | Choice Properties vs. Slate Grocery REIT | Choice Properties vs. Simon Property Group | Choice Properties vs. Firm Capital Property |
Smart REIT vs. Firm Capital Property | Smart REIT vs. Slate Grocery REIT | Smart REIT vs. Phillips Edison Co | Smart REIT vs. Choice Properties Real |
Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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