Correlation Between Choice Properties and Seritage Growth

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

Diversification Opportunities for Choice Properties and Seritage Growth

-0.01

Correlation Coefficient

Choice Properties  Seritage Growth

Good diversification

The 3 months correlation between Choice and Seritage is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Choice Properties Real and Seritage Growth Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seritage Growth Prop 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 Seritage Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seritage Growth Prop has no effect on the direction of Choice Properties i.e., Choice Properties and Seritage Growth go up and down completely randomly.

Pair Corralation between Choice Properties and Seritage Growth

Assuming the 90 days horizon Choice Properties Real is expected to generate 2.61 times more return on investment than Seritage Growth. However, Choice Properties is 2.61 times more volatile than Seritage Growth Properties. It trades about 0.04 of its potential returns per unit of risk. Seritage Growth Properties is currently generating about -0.14 per unit of risk. If you would invest  936.00  in Choice Properties Real on December 22, 2024 and sell it today you would earn a total of  30.00  from holding Choice Properties Real or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.67%
Values	Daily Returns

Choice Properties Real  vs.  Seritage Growth Properties

Choice Properties Real

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Choice Properties Real are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Choice Properties reported solid returns over the last few months and may actually be approaching a breakup point.

Seritage Growth Prop

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seritage Growth Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Choice Properties and Seritage Growth

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

The idea behind Choice Properties Real and Seritage Growth Properties 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.