Correlation Between Dream Office and Triple Flag
Can any of the company-specific risk be diversified away by investing in both Dream Office and Triple Flag 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 Triple Flag 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 Triple Flag Precious, you can compare the effects of market volatilities on Dream Office and Triple Flag 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 Triple Flag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Office and Triple Flag.
Diversification Opportunities for Dream Office and Triple Flag
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dream and Triple is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dream Office Real and Triple Flag Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triple Flag Precious 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 Triple Flag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triple Flag Precious has no effect on the direction of Dream Office i.e., Dream Office and Triple Flag go up and down completely randomly.
Pair Corralation between Dream Office and Triple Flag
Assuming the 90 days trading horizon Dream Office Real is expected to under-perform the Triple Flag. But the stock apears to be less risky and, when comparing its historical volatility, Dream Office Real is 1.38 times less risky than Triple Flag. The stock trades about -0.29 of its potential returns per unit of risk. The Triple Flag Precious is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,326 in Triple Flag Precious on August 25, 2024 and sell it today you would lose (2.00) from holding Triple Flag Precious or give up 0.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Office Real vs. Triple Flag Precious
Performance |
| Timeline |
| Dream Office Real |
| Triple Flag Precious |
Dream Office and Triple Flag Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Office and Triple Flag
The main advantage of trading using opposite Dream Office and Triple Flag positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Office position performs unexpectedly, Triple Flag 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 Triple Flag will offset losses from the drop in Triple Flag'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 |
| Triple Flag vs. Postmedia Network Canada | Triple Flag vs. Rocky Mountain Liquor | Triple Flag vs. Dream Office Real | Triple Flag vs. VIP Entertainment Technologies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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