Correlation Between SmartCentres Real and CT Real

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

By analyzing existing cross correlation between SmartCentres Real Estate and CT Real Estate, you can compare the effects of market volatilities on SmartCentres Real and CT 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 SmartCentres Real with a short position of CT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SmartCentres Real and CT Real.

Diversification Opportunities for SmartCentres Real and CT Real

0.88

Correlation Coefficient

SmartCentres Real  CT Real

Very poor diversification

The 3 months correlation between SmartCentres and CRT-UN is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SmartCentres Real Estate and CT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Real Estate and SmartCentres Real 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 SmartCentres Real Estate are associated (or correlated) with CT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Real Estate has no effect on the direction of SmartCentres Real i.e., SmartCentres Real and CT Real go up and down completely randomly.

Pair Corralation between SmartCentres Real and CT Real

Assuming the 90 days trading horizon SmartCentres Real Estate is expected to generate 1.01 times more return on investment than CT Real. However, SmartCentres Real is 1.01 times more volatile than CT Real Estate. It trades about 0.08 of its potential returns per unit of risk. CT Real Estate is currently generating about -0.04 per unit of risk. If you would invest  2,545  in SmartCentres Real Estate on April 15, 2025 and sell it today you would earn a total of  24.00  from holding SmartCentres Real Estate or generate 0.94% return on investment over 90 days.

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

SmartCentres Real Estate  vs.  CT Real Estate

SmartCentres Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SmartCentres Real Estate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, SmartCentres Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CT Real Estate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CT Real Estate are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CT Real may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SmartCentres Real and CT Real

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

The idea behind SmartCentres Real Estate and CT 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.