Correlation Between Vicinity Centres and Washington

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

By analyzing existing cross correlation between Vicinity Centres and Washington H Soul, you can compare the effects of market volatilities on Vicinity Centres and Washington 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 Vicinity Centres with a short position of Washington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity Centres and Washington.

Diversification Opportunities for Vicinity Centres and Washington

0.81

Correlation Coefficient

Vicinity Centres  Washington

Very poor diversification

The 3 months correlation between Vicinity and Washington is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Centres and Washington H Soul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington H Soul and Vicinity Centres 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 Vicinity Centres are associated (or correlated) with Washington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington H Soul has no effect on the direction of Vicinity Centres i.e., Vicinity Centres and Washington go up and down completely randomly.

Pair Corralation between Vicinity Centres and Washington

Assuming the 90 days trading horizon Vicinity Centres is expected to generate 1.7 times less return on investment than Washington. But when comparing it to its historical volatility, Vicinity Centres is 2.05 times less risky than Washington. It trades about 0.11 of its potential returns per unit of risk. Washington H Soul is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,670  in Washington H Soul on April 23, 2025 and sell it today you would earn a total of  434.00  from holding Washington H Soul or generate 11.83% return on investment over 90 days.

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

Vicinity Centres  vs.  Washington H Soul

Vicinity Centres

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vicinity Centres are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vicinity Centres may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Washington H Soul

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Washington H Soul are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Washington unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vicinity Centres and Washington

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

The idea behind Vicinity Centres and Washington H Soul 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.