Correlation Between Allied Properties and Canadian Apartment
Can any of the company-specific risk be diversified away by investing in both Allied Properties and Canadian Apartment 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 Allied Properties and Canadian Apartment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allied Properties Real and Canadian Apartment Properties, you can compare the effects of market volatilities on Allied Properties and Canadian Apartment 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 Allied Properties with a short position of Canadian Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Properties and Canadian Apartment.
Diversification Opportunities for Allied Properties and Canadian Apartment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allied and Canadian is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Allied Properties Real and Canadian Apartment Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Apartment and Allied Properties 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 Allied Properties Real are associated (or correlated) with Canadian Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Apartment has no effect on the direction of Allied Properties i.e., Allied Properties and Canadian Apartment go up and down completely randomly.
Pair Corralation between Allied Properties and Canadian Apartment
Assuming the 90 days trading horizon Allied Properties Real is expected to under-perform the Canadian Apartment. In addition to that, Allied Properties is 1.35 times more volatile than Canadian Apartment Properties. It trades about -0.02 of its total potential returns per unit of risk. Canadian Apartment Properties is currently generating about -0.02 per unit of volatility. If you would invest 4,684 in Canadian Apartment Properties on November 2, 2024 and sell it today you would lose (647.00) from holding Canadian Apartment Properties or give up 13.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Properties Real vs. Canadian Apartment Properties
Performance |
| Timeline |
| Allied Properties Real |
| Canadian Apartment |
Allied Properties and Canadian Apartment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Properties and Canadian Apartment
The main advantage of trading using opposite Allied Properties and Canadian Apartment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Properties position performs unexpectedly, Canadian Apartment 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 Canadian Apartment will offset losses from the drop in Canadian Apartment's long position.| Allied Properties vs. Canadian Apartment Properties | Allied Properties vs. Granite Real Estate | Allied Properties vs. Choice Properties Real | Allied Properties vs. HR Real Estate |
| Canadian Apartment vs. Allied Properties Real | Canadian Apartment vs. Granite Real Estate | Canadian Apartment vs. Boardwalk Real Estate | Canadian Apartment vs. HR Real Estate |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |