Correlation Between Crombie Real and Canadian Apartment
Can any of the company-specific risk be diversified away by investing in both Crombie Real and Canadian Apartment 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 Canadian Apartment 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 Canadian Apartment Properties, you can compare the effects of market volatilities on Crombie Real and Canadian Apartment 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 Canadian Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crombie Real and Canadian Apartment.
Diversification Opportunities for Crombie Real and Canadian Apartment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crombie and Canadian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Canadian Apartment Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Apartment 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 Canadian Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Apartment has no effect on the direction of Crombie Real i.e., Crombie Real and Canadian Apartment go up and down completely randomly.
Pair Corralation between Crombie Real and Canadian Apartment
Assuming the 90 days trading horizon Crombie Real Estate is expected to under-perform the Canadian Apartment. But the stock apears to be less risky and, when comparing its historical volatility, Crombie Real Estate is 1.34 times less risky than Canadian Apartment. The stock trades about -0.26 of its potential returns per unit of risk. The Canadian Apartment Properties is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 4,708 in Canadian Apartment Properties on August 31, 2024 and sell it today you would lose (147.00) from holding Canadian Apartment Properties or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crombie Real Estate vs. Canadian Apartment Properties
Performance |
| Timeline |
| Crombie Real Estate |
| Canadian Apartment |
Crombie Real and Canadian Apartment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crombie Real and Canadian Apartment
The main advantage of trading using opposite Crombie Real and Canadian Apartment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crombie Real position performs unexpectedly, Canadian Apartment 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 Canadian Apartment will offset losses from the drop in Canadian Apartment's 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 |
| Canadian Apartment vs. Allied Properties Real | Canadian Apartment vs. Granite Real Estate | Canadian Apartment vs. Boardwalk Real Estate | Canadian Apartment 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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