Correlation Between VistaREIT and First Abacus

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

By analyzing existing cross correlation between VistaREIT and First Abacus Financial, you can compare the effects of market volatilities on VistaREIT and First Abacus 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 VistaREIT with a short position of First Abacus. Check out your portfolio center. Please also check ongoing floating volatility patterns of VistaREIT and First Abacus.

Diversification Opportunities for VistaREIT and First Abacus

0.3

Correlation Coefficient

VistaREIT  First Abacus

Weak diversification

The 3 months correlation between VistaREIT and First is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VistaREIT and First Abacus Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Abacus Financial and VistaREIT 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 VistaREIT are associated (or correlated) with First Abacus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Abacus Financial has no effect on the direction of VistaREIT i.e., VistaREIT and First Abacus go up and down completely randomly.

Pair Corralation between VistaREIT and First Abacus

Assuming the 90 days trading horizon VistaREIT is expected to generate 0.13 times more return on investment than First Abacus. However, VistaREIT is 7.54 times less risky than First Abacus. It trades about 0.13 of its potential returns per unit of risk. First Abacus Financial is currently generating about 0.01 per unit of risk. If you would invest  175.00  in VistaREIT on September 12, 2024 and sell it today you would earn a total of  11.00  from holding VistaREIT or generate 6.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	26.98%
Values	Daily Returns

VistaREIT  vs.  First Abacus Financial

VistaREIT

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VistaREIT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, VistaREIT is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

First Abacus Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Abacus Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, First Abacus is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VistaREIT and First Abacus

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

The idea behind VistaREIT and First Abacus Financial 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 Anywhere module to track or share privately all of your investments from the convenience of any device.