Correlation Between Riocan REIT and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both Riocan REIT and Plaza Retail 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 Riocan REIT and Plaza Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riocan REIT and Plaza Retail REIT, you can compare the effects of market volatilities on Riocan REIT and Plaza Retail 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 Riocan REIT with a short position of Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riocan REIT and Plaza Retail.
Diversification Opportunities for Riocan REIT and Plaza Retail
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Riocan and Plaza is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Riocan REIT and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT and Riocan REIT 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 Riocan REIT are associated (or correlated) with Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Riocan REIT i.e., Riocan REIT and Plaza Retail go up and down completely randomly.
Pair Corralation between Riocan REIT and Plaza Retail
Assuming the 90 days horizon Riocan REIT is expected to under-perform the Plaza Retail. But the pink sheet apears to be less risky and, when comparing its historical volatility, Riocan REIT is 1.04 times less risky than Plaza Retail. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Plaza Retail REIT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 245.00 in Plaza Retail REIT on December 28, 2024 and sell it today you would earn a total of 17.00 from holding Plaza Retail REIT or generate 6.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 93.33% |
Values | Daily Returns |
Riocan REIT vs. Plaza Retail REIT
Performance |
Timeline |
Riocan REIT |
Plaza Retail REIT |
Riocan REIT and Plaza Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Riocan REIT and Plaza Retail
The main advantage of trading using opposite Riocan REIT and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riocan REIT position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail's long position.Riocan REIT vs. Choice Properties Real | Riocan REIT vs. Firm Capital Property | Riocan REIT vs. Slate Grocery REIT | Riocan REIT vs. Smart REIT |
Plaza Retail vs. Choice Properties Real | Plaza Retail vs. Firm Capital Property | Plaza Retail vs. Slate Grocery REIT | Plaza Retail vs. Riocan REIT |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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