Correlation Between Allied Properties and Granite Real
Can any of the company-specific risk be diversified away by investing in both Allied Properties and Granite 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 Allied Properties and Granite Real 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 Granite Real Estate, you can compare the effects of market volatilities on Allied Properties and Granite 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 Allied Properties with a short position of Granite Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Properties and Granite Real.
Diversification Opportunities for Allied Properties and Granite Real
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allied and Granite is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Allied Properties Real and Granite Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Real Estate 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 Granite Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Real Estate has no effect on the direction of Allied Properties i.e., Allied Properties and Granite Real go up and down completely randomly.
Pair Corralation between Allied Properties and Granite Real
Assuming the 90 days trading horizon Allied Properties Real is expected to generate 0.94 times more return on investment than Granite Real. However, Allied Properties Real is 1.07 times less risky than Granite Real. It trades about 0.0 of its potential returns per unit of risk. Granite Real Estate is currently generating about -0.03 per unit of risk. If you would invest 1,715 in Allied Properties Real on October 24, 2024 and sell it today you would lose (3.00) from holding Allied Properties Real or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allied Properties Real vs. Granite Real Estate
Performance |
| Timeline |
| Allied Properties Real |
| Granite Real Estate |
Allied Properties and Granite Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Properties and Granite Real
The main advantage of trading using opposite Allied Properties and Granite Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Properties position performs unexpectedly, Granite 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 Granite Real will offset losses from the drop in Granite Real'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 |
| Granite Real vs. Canadian Apartment Properties | Granite Real vs. Dream Industrial Real | Granite Real vs. Allied Properties Real | Granite Real vs. Killam Apartment Real |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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