Correlation Between Plaza Retail and Element Fleet

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Can any of the company-specific risk be diversified away by investing in both Plaza Retail and Element Fleet 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 Plaza Retail and Element Fleet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plaza Retail REIT and Element Fleet Management, you can compare the effects of market volatilities on Plaza Retail and Element Fleet 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 Plaza Retail with a short position of Element Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Element Fleet.

Diversification Opportunities for Plaza Retail and Element Fleet

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Plaza and Element is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Element Fleet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Fleet Management and Plaza Retail 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 Plaza Retail REIT are associated (or correlated) with Element Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Fleet Management has no effect on the direction of Plaza Retail i.e., Plaza Retail and Element Fleet go up and down completely randomly.

Pair Corralation between Plaza Retail and Element Fleet

Assuming the 90 days trading horizon Plaza Retail is expected to generate 1.98 times less return on investment than Element Fleet. But when comparing it to its historical volatility, Plaza Retail REIT is 1.57 times less risky than Element Fleet. It trades about 0.22 of its potential returns per unit of risk. Element Fleet Management is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  3,057  in Element Fleet Management on April 23, 2025 and sell it today you would earn a total of  513.00  from holding Element Fleet Management or generate 16.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Plaza Retail REIT  vs.  Element Fleet Management

 Performance 
       Timeline  
Plaza Retail REIT 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Plaza Retail may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Element Fleet Management 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Element Fleet displayed solid returns over the last few months and may actually be approaching a breakup point.

Plaza Retail and Element Fleet Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Plaza Retail and Element Fleet

The main advantage of trading using opposite Plaza Retail and Element Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza Retail position performs unexpectedly, Element Fleet 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 Element Fleet will offset losses from the drop in Element Fleet's long position.
The idea behind Plaza Retail REIT and Element Fleet Management 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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