Correlation Between Rreef Property and World Energy

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

By analyzing existing cross correlation between Rreef Property Trust and World Energy Fund, you can compare the effects of market volatilities on Rreef Property and World Energy 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 Rreef Property with a short position of World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rreef Property and World Energy.

Diversification Opportunities for Rreef Property and World Energy

0.16

Correlation Coefficient

Rreef Property  World Energy

Average diversification

The 3 months correlation between Rreef and World is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Rreef Property Trust and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy and Rreef Property 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 Rreef Property Trust are associated (or correlated) with World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Rreef Property i.e., Rreef Property and World Energy go up and down completely randomly.

Pair Corralation between Rreef Property and World Energy

Assuming the 90 days trading horizon Rreef Property Trust is expected to under-perform the World Energy. But the fund apears to be less risky and, when comparing its historical volatility, Rreef Property Trust is 5.46 times less risky than World Energy. The fund trades about -0.21 of its potential returns per unit of risk. The World Energy Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,499  in World Energy Fund on October 12, 2024 and sell it today you would earn a total of  9.00  from holding World Energy Fund or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Rreef Property Trust  vs.  World Energy Fund

Rreef Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rreef Property Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rreef Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

World Energy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in World Energy Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, World Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rreef Property and World Energy

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

The idea behind Rreef Property Trust and World Energy Fund 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.