Correlation Between RL Commercial and Citicore Energy

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

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

Diversification Opportunities for RL Commercial and Citicore Energy

0.97

Correlation Coefficient

RL Commercial  Citicore Energy

Almost no diversification

The 3 months correlation between RCR and Citicore is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding RL Commercial REIT 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 RL Commercial 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 RL Commercial REIT 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 RL Commercial i.e., RL Commercial and Citicore Energy go up and down completely randomly.

Pair Corralation between RL Commercial and Citicore Energy

Assuming the 90 days trading horizon RL Commercial REIT is expected to generate 1.1 times more return on investment than Citicore Energy. However, RL Commercial is 1.1 times more volatile than Citicore Energy REIT. It trades about 0.34 of its potential returns per unit of risk. Citicore Energy REIT is currently generating about 0.27 per unit of risk. If you would invest  636.00  in RL Commercial REIT on April 21, 2025 and sell it today you would earn a total of  144.00  from holding RL Commercial REIT or generate 22.64% return on investment over 90 days.

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

RL Commercial REIT  vs.  Citicore Energy REIT

RL Commercial REIT

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in RL Commercial REIT are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, RL Commercial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Citicore Energy REIT

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citicore Energy REIT are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain 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 RL Commercial and Citicore Energy

The main advantage of trading using opposite RL Commercial and Citicore Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RL Commercial 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 RL Commercial REIT 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.