Correlation Between BTB Real and Aecon
Can any of the company-specific risk be diversified away by investing in both BTB Real and Aecon 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 Aecon 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 Aecon Group, you can compare the effects of market volatilities on BTB Real and Aecon 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 Aecon. Check out your portfolio center. Please also check ongoing floating volatility patterns of BTB Real and Aecon.
Diversification Opportunities for BTB Real and Aecon
Good diversification
The 3 months correlation between BTB and Aecon is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding BTB Real Estate and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group 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 Aecon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecon Group has no effect on the direction of BTB Real i.e., BTB Real and Aecon go up and down completely randomly.
Pair Corralation between BTB Real and Aecon
Assuming the 90 days horizon BTB Real Estate is expected to generate 0.39 times more return on investment than Aecon. However, BTB Real Estate is 2.54 times less risky than Aecon. It trades about -0.35 of its potential returns per unit of risk. Aecon Group is currently generating about -0.17 per unit of risk. If you would invest 258.00 in BTB Real Estate on September 12, 2024 and sell it today you would lose (14.00) from holding BTB Real Estate or give up 5.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BTB Real Estate vs. Aecon Group
Performance |
| Timeline |
| BTB Real Estate |
| Aecon Group |
BTB Real and Aecon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BTB Real and Aecon
The main advantage of trading using opposite BTB Real and Aecon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTB Real position performs unexpectedly, Aecon 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 Aecon will offset losses from the drop in Aecon's long position.| BTB Real vs. City Office | BTB Real vs. Vornado Realty Trust | BTB Real vs. Cousins Properties Incorporated | BTB Real vs. Highwoods Properties |
| Aecon vs. HUMANA INC | Aecon vs. Barloworld Ltd ADR | Aecon vs. Morningstar Unconstrained Allocation | Aecon vs. Thrivent High Yield |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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