Correlation Between BTB Real and Dream Industrial
Can any of the company-specific risk be diversified away by investing in both BTB Real and Dream Industrial 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 BTB Real and Dream Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BTB Real Estate and Dream Industrial Real, you can compare the effects of market volatilities on BTB Real and Dream Industrial 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 BTB Real with a short position of Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTB Real and Dream Industrial.
Diversification Opportunities for BTB Real and Dream Industrial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BTB and Dream is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BTB Real Estate and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real and BTB 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 BTB Real Estate are associated (or correlated) with Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of BTB Real i.e., BTB Real and Dream Industrial go up and down completely randomly.
Pair Corralation between BTB Real and Dream Industrial
Assuming the 90 days trading horizon BTB Real is expected to generate 1.14 times less return on investment than Dream Industrial. But when comparing it to its historical volatility, BTB Real Estate is 1.05 times less risky than Dream Industrial. It trades about 0.03 of its potential returns per unit of risk. Dream Industrial Real is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,102 in Dream Industrial Real on September 3, 2024 and sell it today you would earn a total of 168.00 from holding Dream Industrial Real or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTB Real Estate vs. Dream Industrial Real
Performance |
| Timeline |
| BTB Real Estate |
| Dream Industrial Real |
BTB Real and Dream Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTB Real and Dream Industrial
The main advantage of trading using opposite BTB Real and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTB Real position performs unexpectedly, Dream Industrial 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 Dream Industrial will offset losses from the drop in Dream Industrial's long position.| BTB Real vs. True North Commercial | BTB Real vs. Slate Office REIT | BTB Real vs. Inovalis Real Estate | BTB Real vs. Pro Real Estate |
| Dream Industrial vs. Granite Real Estate | Dream Industrial vs. NorthWest Healthcare Properties | Dream Industrial vs. Choice Properties Real | Dream Industrial vs. Canadian Apartment Properties |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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