Correlation Between MREIT and Citicore Energy

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

By analyzing existing cross correlation between MREIT Inc and Citicore Energy REIT, you can compare the effects of market volatilities on MREIT and Citicore 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 MREIT with a short position of Citicore Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MREIT and Citicore Energy.

Diversification Opportunities for MREIT and Citicore Energy

0.67

Correlation Coefficient

MREIT  Citicore Energy

Poor diversification

The 3 months correlation between MREIT and Citicore is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MREIT Inc and Citicore Energy REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citicore Energy REIT and MREIT 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 MREIT Inc are associated (or correlated) with Citicore Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citicore Energy REIT has no effect on the direction of MREIT i.e., MREIT and Citicore Energy go up and down completely randomly.

Pair Corralation between MREIT and Citicore Energy

Assuming the 90 days trading horizon MREIT is expected to generate 3.66 times less return on investment than Citicore Energy. But when comparing it to its historical volatility, MREIT Inc is 1.74 times less risky than Citicore Energy. It trades about 0.13 of its potential returns per unit of risk. Citicore Energy REIT is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  316.00  in Citicore Energy REIT on April 22, 2025 and sell it today you would earn a total of  50.00  from holding Citicore Energy REIT or generate 15.82% return on investment over 90 days.

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

MREIT Inc  vs.  Citicore Energy REIT

MREIT Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MREIT Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, MREIT is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Citicore Energy REIT

Risk-Adjusted Performance

Solid

Over the last 90 days Citicore Energy REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak technical and fundamental indicators, Citicore Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MREIT and Citicore Energy

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

The idea behind MREIT Inc and Citicore Energy REIT 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.