Correlation Between Choice Properties and RioCan Real
Can any of the company-specific risk be diversified away by investing in both Choice Properties and RioCan 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 RioCan 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 RioCan Real Estate, you can compare the effects of market volatilities on Choice Properties and RioCan 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 RioCan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Properties and RioCan Real.
Diversification Opportunities for Choice Properties and RioCan Real
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choice and RioCan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Choice Properties Real and RioCan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RioCan 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 RioCan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RioCan Real Estate has no effect on the direction of Choice Properties i.e., Choice Properties and RioCan Real go up and down completely randomly.
Pair Corralation between Choice Properties and RioCan Real
Assuming the 90 days trading horizon Choice Properties is expected to generate 1.25 times less return on investment than RioCan Real. But when comparing it to its historical volatility, Choice Properties Real is 1.13 times less risky than RioCan Real. It trades about 0.07 of its potential returns per unit of risk. RioCan Real Estate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,702 in RioCan Real Estate on August 25, 2024 and sell it today you would earn a total of 190.00 from holding RioCan Real Estate or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Properties Real vs. RioCan Real Estate
Performance |
| Timeline |
| Choice Properties Real |
| RioCan Real Estate |
Choice Properties and RioCan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Properties and RioCan Real
The main advantage of trading using opposite Choice Properties and RioCan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Properties position performs unexpectedly, RioCan 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 RioCan Real will offset losses from the drop in RioCan 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 |
| RioCan Real vs. SmartCentres Real Estate | RioCan Real vs. HR Real Estate | RioCan Real vs. Fortis Inc | RioCan Real vs. Enbridge |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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