Correlation Between Dream Office and HR Real
Can any of the company-specific risk be diversified away by investing in both Dream Office and HR 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 Dream Office and HR Real 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 HR Real Estate, you can compare the effects of market volatilities on Dream Office and HR 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 Dream Office with a short position of HR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Office and HR Real.
Diversification Opportunities for Dream Office and HR Real
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dream and HR-UN is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dream Office Real and HR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Real Estate 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 HR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Real Estate has no effect on the direction of Dream Office i.e., Dream Office and HR Real go up and down completely randomly.
Pair Corralation between Dream Office and HR Real
Assuming the 90 days trading horizon Dream Office Real is expected to generate 1.75 times more return on investment than HR Real. However, Dream Office is 1.75 times more volatile than HR Real Estate. It trades about 0.1 of its potential returns per unit of risk. HR Real Estate is currently generating about -0.05 per unit of risk. If you would invest 1,784 in Dream Office Real on November 4, 2024 and sell it today you would earn a total of 66.00 from holding Dream Office Real or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Office Real vs. HR Real Estate
Performance |
| Timeline |
| Dream Office Real |
| HR Real Estate |
Dream Office and HR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Office and HR Real
The main advantage of trading using opposite Dream Office and HR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Office position performs unexpectedly, HR 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 HR Real will offset losses from the drop in HR Real'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 |
| HR Real vs. RioCan Real Estate | HR Real vs. Canadian Apartment Properties | HR Real vs. SmartCentres Real Estate | HR Real vs. Allied Properties 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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