Correlation Between Crombie Real and Allied Properties
Can any of the company-specific risk be diversified away by investing in both Crombie Real and Allied Properties 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 Crombie Real and Allied Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crombie Real Estate and Allied Properties Real, you can compare the effects of market volatilities on Crombie Real and Allied Properties 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 Crombie Real with a short position of Allied Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crombie Real and Allied Properties.
Diversification Opportunities for Crombie Real and Allied Properties
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crombie and Allied is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Allied Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Properties Real and Crombie 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 Crombie Real Estate are associated (or correlated) with Allied Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Properties Real has no effect on the direction of Crombie Real i.e., Crombie Real and Allied Properties go up and down completely randomly.
Pair Corralation between Crombie Real and Allied Properties
Assuming the 90 days trading horizon Crombie Real Estate is expected to generate 0.6 times more return on investment than Allied Properties. However, Crombie Real Estate is 1.66 times less risky than Allied Properties. It trades about 0.12 of its potential returns per unit of risk. Allied Properties Real is currently generating about 0.06 per unit of risk. If you would invest 1,236 in Crombie Real Estate on August 29, 2024 and sell it today you would earn a total of 197.00 from holding Crombie Real Estate or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crombie Real Estate vs. Allied Properties Real
Performance |
| Timeline |
| Crombie Real Estate |
| Allied Properties Real |
Crombie Real and Allied Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crombie Real and Allied Properties
The main advantage of trading using opposite Crombie Real and Allied Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crombie Real position performs unexpectedly, Allied Properties 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 Allied Properties will offset losses from the drop in Allied Properties' long position.| Crombie Real vs. Artis Real Estate | Crombie Real vs. Choice Properties Real | Crombie Real vs. Killam Apartment Real | Crombie Real vs. Boardwalk Real Estate |
| Allied Properties vs. Canadian Apartment Properties | Allied Properties vs. Granite Real Estate | Allied Properties vs. Choice Properties Real | Allied Properties vs. HR Real Estate |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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