Correlation Between Short Real and Rreef Property

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

By analyzing existing cross correlation between Short Real Estate and Rreef Property Trust, you can compare the effects of market volatilities on Short Real and Rreef 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 Short Real with a short position of Rreef Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Real and Rreef Property.

Diversification Opportunities for Short Real and Rreef Property

-0.07

Correlation Coefficient

Short Real  Rreef Property

Good diversification

The 3 months correlation between Short and Rreef is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Short Real Estate and Rreef Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rreef Property Trust and Short Real 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 Short Real Estate are associated (or correlated) with Rreef Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rreef Property Trust has no effect on the direction of Short Real i.e., Short Real and Rreef Property go up and down completely randomly.

Pair Corralation between Short Real and Rreef Property

Assuming the 90 days horizon Short Real Estate is expected to under-perform the Rreef Property. In addition to that, Short Real is 5.59 times more volatile than Rreef Property Trust. It trades about -0.05 of its total potential returns per unit of risk. Rreef Property Trust is currently generating about 0.02 per unit of volatility. If you would invest  1,347  in Rreef Property Trust on October 22, 2024 and sell it today you would earn a total of  1.00  from holding Rreef Property Trust or generate 0.07% return on investment over 90 days.

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

Short Real Estate  vs.  Rreef Property Trust

Short Real Estate

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Short Real Estate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Short Real may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Rreef Property Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rreef Property Trust are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rreef Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Short Real and Rreef Property

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

The idea behind Short Real Estate and Rreef 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.