Correlation Between Seritage Growth and Rithm Property

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

Diversification Opportunities for Seritage Growth and Rithm Property

0.43

Correlation Coefficient

Seritage Growth  Rithm Property

Very weak diversification

The 3 months correlation between Seritage and Rithm is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Seritage Growth Properties and Rithm Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rithm Property Trust 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 Rithm Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rithm Property Trust has no effect on the direction of Seritage Growth i.e., Seritage Growth and Rithm Property go up and down completely randomly.

Pair Corralation between Seritage Growth and Rithm Property

Considering the 90-day investment horizon Seritage Growth Properties is expected to under-perform the Rithm Property. In addition to that, Seritage Growth is 1.16 times more volatile than Rithm Property Trust. It trades about -0.1 of its total potential returns per unit of risk. Rithm Property Trust is currently generating about -0.05 per unit of volatility. If you would invest  432.00  in Rithm Property Trust on October 7, 2024 and sell it today you would lose (133.00) from holding Rithm Property Trust or give up 30.79% of portfolio value over 90 days.

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

Seritage Growth Properties  vs.  Rithm Property Trust

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 latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Rithm Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rithm Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Rithm Property is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Seritage Growth and Rithm Property

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

The idea behind Seritage Growth Properties and Rithm Property Trust 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.