Correlation Between Retail Opportunity and Four Corners

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

By analyzing existing cross correlation between Retail Opportunity Investments and Four Corners Property, you can compare the effects of market volatilities on Retail Opportunity and Four Corners 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 Retail Opportunity with a short position of Four Corners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Four Corners.

Diversification Opportunities for Retail Opportunity and Four Corners

0.0

Correlation Coefficient

Retail Opportunity  Four Corners

Pay attention - limited upside

The 3 months correlation between Retail and Four is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and Four Corners Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Corners Property and Retail Opportunity 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 Retail Opportunity Investments are associated (or correlated) with Four Corners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Corners Property has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and Four Corners go up and down completely randomly.

Pair Corralation between Retail Opportunity and Four Corners

If you would invest  2,741  in Four Corners Property on February 12, 2025 and sell it today you would lose (8.00) from holding Four Corners Property or give up 0.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.23%
Values	Daily Returns

Retail Opportunity Investments  vs.  Four Corners Property

Retail Opportunity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Retail Opportunity Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Retail Opportunity is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Four Corners Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Four Corners Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Four Corners is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Retail Opportunity and Four Corners

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

The idea behind Retail Opportunity Investments and Four Corners Property 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.