Correlation Between Canadian Apartment and Slate Grocery
Can any of the company-specific risk be diversified away by investing in both Canadian Apartment and Slate Grocery 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 Canadian Apartment and Slate Grocery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Apartment Properties and Slate Grocery REIT, you can compare the effects of market volatilities on Canadian Apartment and Slate Grocery 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 Canadian Apartment with a short position of Slate Grocery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Apartment and Slate Grocery.
Diversification Opportunities for Canadian Apartment and Slate Grocery
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canadian and Slate is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Apartment Properties and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT and Canadian Apartment 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 Canadian Apartment Properties are associated (or correlated) with Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Canadian Apartment i.e., Canadian Apartment and Slate Grocery go up and down completely randomly.
Pair Corralation between Canadian Apartment and Slate Grocery
Assuming the 90 days trading horizon Canadian Apartment Properties is expected to under-perform the Slate Grocery. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Apartment Properties is 1.4 times less risky than Slate Grocery. The stock trades about -0.07 of its potential returns per unit of risk. The Slate Grocery REIT is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Slate Grocery REIT on September 13, 2024 and sell it today you would earn a total of 30.00 from holding Slate Grocery REIT or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Apartment Properties vs. Slate Grocery REIT
Performance |
| Timeline |
| Canadian Apartment |
| Slate Grocery REIT |
Canadian Apartment and Slate Grocery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Apartment and Slate Grocery
The main advantage of trading using opposite Canadian Apartment and Slate Grocery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Apartment position performs unexpectedly, Slate Grocery 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 Slate Grocery will offset losses from the drop in Slate Grocery's long position.| Canadian Apartment vs. Allied Properties Real | Canadian Apartment vs. Granite Real Estate | Canadian Apartment vs. Boardwalk Real Estate | Canadian Apartment vs. HR Real Estate |
| Slate Grocery vs. Slate Office REIT | Slate Grocery vs. Automotive Properties Real | Slate Grocery vs. BTB Real Estate | Slate Grocery vs. iShares Canadian HYBrid |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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