Correlation Between Rreef Property and Jhancock Real

Can any of the company-specific risk be diversified away by investing in both Rreef Property and Jhancock Real 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 Jhancock Real 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 Jhancock Real Estate, you can compare the effects of market volatilities on Rreef Property and Jhancock Real 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 Jhancock Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rreef Property and Jhancock Real.

Diversification Opportunities for Rreef Property and Jhancock Real

0.86

Correlation Coefficient

Rreef Property  Jhancock Real

Very poor diversification

The 3 months correlation between Rreef and Jhancock is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Rreef Property Trust and Jhancock Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Real Estate 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 Jhancock Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Real Estate has no effect on the direction of Rreef Property i.e., Rreef Property and Jhancock Real go up and down completely randomly.

Pair Corralation between Rreef Property and Jhancock Real

Assuming the 90 days trading horizon Rreef Property is expected to generate 3.59 times less return on investment than Jhancock Real. But when comparing it to its historical volatility, Rreef Property Trust is 5.33 times less risky than Jhancock Real. It trades about 0.04 of its potential returns per unit of risk. Jhancock Real Estate is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,193  in Jhancock Real Estate on October 25, 2024 and sell it today you would earn a total of  33.00  from holding Jhancock Real Estate or generate 2.77% return on investment over 90 days.

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

Rreef Property Trust  vs.  Jhancock Real Estate

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.

Jhancock Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jhancock Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Jhancock Real 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 Jhancock Real

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

The idea behind Rreef Property Trust and Jhancock Real Estate 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.