Correlation Between Twin Ridge and Plaza Retail

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

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

Diversification Opportunities for Twin Ridge and Plaza Retail

0.0

Correlation Coefficient

Twin Ridge  Plaza Retail

Pay attention - limited upside

The 3 months correlation between Twin and Plaza is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Twin Ridge Capital 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 Twin Ridge 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 Twin Ridge Capital 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 Twin Ridge i.e., Twin Ridge and Plaza Retail go up and down completely randomly.

Pair Corralation between Twin Ridge and Plaza Retail

If you would invest  246.00  in Plaza Retail REIT on December 27, 2024 and sell it today you would earn a total of  16.00  from holding Plaza Retail REIT or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Twin Ridge Capital  vs.  Plaza Retail REIT

Twin Ridge Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Twin Ridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Twin Ridge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Plaza Retail REIT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Plaza Retail may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Twin Ridge and Plaza Retail

The main advantage of trading using opposite Twin Ridge and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twin Ridge 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.

The idea behind Twin Ridge Capital and Plaza Retail REIT 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.