Correlation Between VistaREIT and Swift Foods

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

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

Diversification Opportunities for VistaREIT and Swift Foods

-0.36

Correlation Coefficient

VistaREIT  Swift Foods

Very good diversification

The 3 months correlation between VistaREIT and Swift is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding VistaREIT and Swift Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Foods 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 Swift Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Foods has no effect on the direction of VistaREIT i.e., VistaREIT and Swift Foods go up and down completely randomly.

Pair Corralation between VistaREIT and Swift Foods

Assuming the 90 days trading horizon VistaREIT is expected to generate 0.18 times more return on investment than Swift Foods. However, VistaREIT is 5.45 times less risky than Swift Foods. It trades about 0.13 of its potential returns per unit of risk. Swift Foods is currently generating about 0.0 per unit of risk. If you would invest  163.00  in VistaREIT on September 23, 2024 and sell it today you would earn a total of  23.00  from holding VistaREIT or generate 14.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

VistaREIT  vs.  Swift Foods

VistaREIT

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VistaREIT are ranked lower than 9 (%) 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.

Swift Foods

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swift Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Swift Foods is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VistaREIT and Swift Foods

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

The idea behind VistaREIT and Swift Foods 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.