Correlation Between VistaREIT and Philex Mining

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

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

Diversification Opportunities for VistaREIT and Philex Mining

-0.24

Correlation Coefficient

VistaREIT  Philex Mining

Very good diversification

The 3 months correlation between VistaREIT and Philex is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding VistaREIT and Philex Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philex Mining Corp 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 Philex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philex Mining Corp has no effect on the direction of VistaREIT i.e., VistaREIT and Philex Mining go up and down completely randomly.

Pair Corralation between VistaREIT and Philex Mining

Assuming the 90 days trading horizon VistaREIT is expected to generate 0.34 times more return on investment than Philex Mining. However, VistaREIT is 2.92 times less risky than Philex Mining. It trades about 0.13 of its potential returns per unit of risk. Philex Mining Corp is currently generating about 0.03 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

VistaREIT  vs.  Philex Mining Corp

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.

Philex Mining Corp

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Philex Mining Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Philex Mining is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VistaREIT and Philex Mining

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

The idea behind VistaREIT and Philex Mining Corp 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.