Correlation Between Dream Office and ATCO
Can any of the company-specific risk be diversified away by investing in both Dream Office and ATCO 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 Dream Office and ATCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Office Real and ATCO, you can compare the effects of market volatilities on Dream Office and ATCO 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 Dream Office with a short position of ATCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Office and ATCO.
Diversification Opportunities for Dream Office and ATCO
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dream and ATCO is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dream Office Real and ATCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATCO and Dream Office 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 Dream Office Real are associated (or correlated) with ATCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATCO has no effect on the direction of Dream Office i.e., Dream Office and ATCO go up and down completely randomly.
Pair Corralation between Dream Office and ATCO
Assuming the 90 days trading horizon Dream Office Real is expected to generate 1.2 times more return on investment than ATCO. However, Dream Office is 1.2 times more volatile than ATCO. It trades about -0.07 of its potential returns per unit of risk. ATCO is currently generating about -0.1 per unit of risk. If you would invest 1,792 in Dream Office Real on October 15, 2024 and sell it today you would lose (42.00) from holding Dream Office Real or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Office Real vs. ATCO
Performance |
| Timeline |
| Dream Office Real |
| ATCO |
Dream Office and ATCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Office and ATCO
The main advantage of trading using opposite Dream Office and ATCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Office position performs unexpectedly, ATCO 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 ATCO will offset losses from the drop in ATCO's long position.| Dream Office vs. Artis Real Estate | Dream Office vs. Boardwalk Real Estate | Dream Office vs. Allied Properties Real | Dream Office vs. HR Real Estate |
| ATCO vs. High Liner Foods | ATCO vs. Dream Office Real | ATCO vs. Hemisphere Energy | ATCO vs. Computer Modelling Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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