Correlation Between Plaza Retail and Inovalis Real

Can any of the company-specific risk be diversified away by investing in both Plaza Retail and Inovalis 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 Plaza Retail and Inovalis Real 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 Inovalis Real Estate, you can compare the effects of market volatilities on Plaza Retail and Inovalis 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 Plaza Retail with a short position of Inovalis Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza Retail and Inovalis Real.

Diversification Opportunities for Plaza Retail and Inovalis Real

0.23

Correlation Coefficient

Plaza Retail  Inovalis Real

Modest diversification

The 3 months correlation between Plaza and Inovalis is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Plaza Retail REIT and Inovalis Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inovalis Real Estate 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 Inovalis Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inovalis Real Estate has no effect on the direction of Plaza Retail i.e., Plaza Retail and Inovalis Real go up and down completely randomly.

Pair Corralation between Plaza Retail and Inovalis Real

Assuming the 90 days trading horizon Plaza Retail REIT is expected to generate 0.21 times more return on investment than Inovalis Real. However, Plaza Retail REIT is 4.72 times less risky than Inovalis Real. It trades about 0.27 of its potential returns per unit of risk. Inovalis Real Estate is currently generating about 0.04 per unit of risk. If you would invest  368.00  in Plaza Retail REIT on April 25, 2025 and sell it today you would earn a total of  40.00  from holding Plaza Retail REIT or generate 10.87% return on investment over 90 days.

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

Plaza Retail REIT  vs.  Inovalis Real Estate

Plaza Retail REIT

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 20 (%) 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.

Inovalis Real Estate

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inovalis Real Estate are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Inovalis Real may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Plaza Retail and Inovalis Real

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

The idea behind Plaza Retail REIT and Inovalis 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.