Correlation Between Retail Estates and Immobel

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

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

Diversification Opportunities for Retail Estates and Immobel

-0.2

Correlation Coefficient

Retail Estates  Immobel

Good diversification

The 3 months correlation between Retail and Immobel is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Immobel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobel and Retail Estates 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 Retail Estates are associated (or correlated) with Immobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobel has no effect on the direction of Retail Estates i.e., Retail Estates and Immobel go up and down completely randomly.

Pair Corralation between Retail Estates and Immobel

Assuming the 90 days trading horizon Retail Estates is expected to generate 0.36 times more return on investment than Immobel. However, Retail Estates is 2.8 times less risky than Immobel. It trades about 0.29 of its potential returns per unit of risk. Immobel is currently generating about 0.0 per unit of risk. If you would invest  5,710  in Retail Estates on December 4, 2024 and sell it today you would earn a total of  240.00  from holding Retail Estates or generate 4.2% return on investment over 90 days.

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

Retail Estates   vs.  Immobel

Retail Estates

Risk-Adjusted Performance

Very Weak

Over the last 90 days Retail Estates has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Retail Estates is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Immobel

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Immobel are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Immobel reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Retail Estates and Immobel

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

The idea behind Retail Estates and Immobel 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.