Correlation Between Boardwalk Real and Sienna Senior
Can any of the company-specific risk be diversified away by investing in both Boardwalk Real and Sienna Senior 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 Boardwalk Real and Sienna Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boardwalk Real Estate and Sienna Senior Living, you can compare the effects of market volatilities on Boardwalk Real and Sienna Senior 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 Boardwalk Real with a short position of Sienna Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boardwalk Real and Sienna Senior.
Diversification Opportunities for Boardwalk Real and Sienna Senior
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boardwalk and Sienna is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Boardwalk Real Estate and Sienna Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Senior Living and Boardwalk 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 Boardwalk Real Estate are associated (or correlated) with Sienna Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Senior Living has no effect on the direction of Boardwalk Real i.e., Boardwalk Real and Sienna Senior go up and down completely randomly.
Pair Corralation between Boardwalk Real and Sienna Senior
Assuming the 90 days trading horizon Boardwalk Real Estate is expected to under-perform the Sienna Senior. But the stock apears to be less risky and, when comparing its historical volatility, Boardwalk Real Estate is 1.06 times less risky than Sienna Senior. The stock trades about -0.02 of its potential returns per unit of risk. The Sienna Senior Living is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,262 in Sienna Senior Living on September 1, 2024 and sell it today you would earn a total of 436.00 from holding Sienna Senior Living or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Boardwalk Real Estate vs. Sienna Senior Living
Performance |
| Timeline |
| Boardwalk Real Estate |
| Sienna Senior Living |
Boardwalk Real and Sienna Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boardwalk Real and Sienna Senior
The main advantage of trading using opposite Boardwalk Real and Sienna Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boardwalk Real position performs unexpectedly, Sienna Senior 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 Sienna Senior will offset losses from the drop in Sienna Senior's long position.| Boardwalk Real vs. Canadian Apartment Properties | Boardwalk Real vs. Dream Office Real | Boardwalk Real vs. Artis Real Estate | Boardwalk Real vs. Allied Properties Real |
| Sienna Senior vs. Extendicare | Sienna Senior vs. Chartwell Retirement Residences | Sienna Senior vs. NorthWest Healthcare Properties | Sienna Senior vs. Dream Industrial 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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