Correlation Between Choice Properties and Granite Real
Can any of the company-specific risk be diversified away by investing in both Choice 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 Choice 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 Choice Properties Real and Granite Real Estate, you can compare the effects of market volatilities on Choice 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 Choice Properties with a short position of Granite Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Properties and Granite Real.
Diversification Opportunities for Choice Properties and Granite Real
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Choice and Granite is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Choice 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 Choice 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 Choice 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 Choice Properties i.e., Choice Properties and Granite Real go up and down completely randomly.
Pair Corralation between Choice Properties and Granite Real
Assuming the 90 days trading horizon Choice Properties is expected to generate 1.09 times less return on investment than Granite Real. But when comparing it to its historical volatility, Choice Properties Real is 1.19 times less risky than Granite Real. It trades about 0.07 of its potential returns per unit of risk. Granite Real Estate is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,755 in Granite Real Estate on August 25, 2024 and sell it today you would earn a total of 638.00 from holding Granite Real Estate or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Properties Real vs. Granite Real Estate
Performance |
| Timeline |
| Choice Properties Real |
| Granite Real Estate |
Choice Properties and Granite Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Properties and Granite Real
The main advantage of trading using opposite Choice Properties and Granite Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice 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.| Choice Properties vs. CT Real Estate | Choice Properties vs. Crombie Real Estate | Choice Properties vs. Allied Properties Real | Choice Properties vs. Dream Industrial Real |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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