Correlation Between Firm Capital and Site Centers

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

By analyzing existing cross correlation between Firm Capital Property and Site Centers Corp, you can compare the effects of market volatilities on Firm Capital and Site Centers 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 Firm Capital with a short position of Site Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firm Capital and Site Centers.

Diversification Opportunities for Firm Capital and Site Centers

0.38

Correlation Coefficient

Firm Capital  Site Centers

Weak diversification

The 3 months correlation between Firm and Site is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Firm Capital Property and Site Centers Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Site Centers Corp and Firm Capital 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 Firm Capital Property are associated (or correlated) with Site Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Site Centers Corp has no effect on the direction of Firm Capital i.e., Firm Capital and Site Centers go up and down completely randomly.

Pair Corralation between Firm Capital and Site Centers

Assuming the 90 days horizon Firm Capital Property is expected to generate 18.23 times more return on investment than Site Centers. However, Firm Capital is 18.23 times more volatile than Site Centers Corp. It trades about 0.05 of its potential returns per unit of risk. Site Centers Corp is currently generating about 0.06 per unit of risk. If you would invest  308.00  in Firm Capital Property on September 13, 2024 and sell it today you would earn a total of  86.00  from holding Firm Capital Property or generate 27.92% return on investment over 90 days.

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

Firm Capital Property  vs.  Site Centers Corp

Firm Capital Property

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Firm Capital Property are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Firm Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Site Centers Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Site Centers Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Site Centers exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Firm Capital and Site Centers

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

The idea behind Firm Capital Property and Site Centers 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.

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.