Correlation Between Seritage Growth and Klpierre

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

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

Diversification Opportunities for Seritage Growth and Klpierre

0.28

Correlation Coefficient

Seritage Growth  Klpierre

Modest diversification

The 3 months correlation between Seritage and Klpierre is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Seritage Growth Properties and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA and Seritage Growth 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 Seritage Growth Properties are associated (or correlated) with Klpierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Seritage Growth i.e., Seritage Growth and Klpierre go up and down completely randomly.

Pair Corralation between Seritage Growth and Klpierre

Considering the 90-day investment horizon Seritage Growth Properties is expected to generate 1.12 times more return on investment than Klpierre. However, Seritage Growth is 1.12 times more volatile than Klpierre SA. It trades about -0.03 of its potential returns per unit of risk. Klpierre SA is currently generating about -0.07 per unit of risk. If you would invest  453.00  in Seritage Growth Properties on September 13, 2024 and sell it today you would lose (24.00) from holding Seritage Growth Properties or give up 5.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Seritage Growth Properties  vs.  Klpierre SA

Seritage Growth Prop

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, Seritage Growth is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Klpierre SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Klpierre SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Seritage Growth and Klpierre

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

The idea behind Seritage Growth Properties and Klpierre SA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.