Correlation Between VistaREIT and National Reinsurance

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

By analyzing existing cross correlation between VistaREIT and National Reinsurance, you can compare the effects of market volatilities on VistaREIT and National Reinsurance 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 National Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of VistaREIT and National Reinsurance.

Diversification Opportunities for VistaREIT and National Reinsurance

-0.4

Correlation Coefficient

VistaREIT  National Reinsurance

Very good diversification

The 3 months correlation between VistaREIT and National is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding VistaREIT and National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Reinsurance 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 National Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Reinsurance has no effect on the direction of VistaREIT i.e., VistaREIT and National Reinsurance go up and down completely randomly.

Pair Corralation between VistaREIT and National Reinsurance

Assuming the 90 days trading horizon VistaREIT is expected to generate 3.06 times less return on investment than National Reinsurance. But when comparing it to its historical volatility, VistaREIT is 4.28 times less risky than National Reinsurance. It trades about 0.21 of its potential returns per unit of risk. National Reinsurance is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  59.00  in National Reinsurance on September 24, 2024 and sell it today you would earn a total of  10.00  from holding National Reinsurance or generate 16.95% return on investment over 90 days.

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

VistaREIT  vs.  National Reinsurance

VistaREIT

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VistaREIT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, VistaREIT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

National Reinsurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Reinsurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Reinsurance 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 VistaREIT and National Reinsurance

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

The idea behind VistaREIT and National Reinsurance 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 Stocks Directory module to find actively traded stocks across global markets.