Correlation Between Dream Office and Winpak
Can any of the company-specific risk be diversified away by investing in both Dream Office and Winpak 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 Winpak 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 Winpak, you can compare the effects of market volatilities on Dream Office and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Office and Winpak.
Diversification Opportunities for Dream Office and Winpak
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Winpak is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dream Office Real and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Dream Office i.e., Dream Office and Winpak go up and down completely randomly.
Pair Corralation between Dream Office and Winpak
Assuming the 90 days trading horizon Dream Office Real is expected to under-perform the Winpak. In addition to that, Dream Office is 1.01 times more volatile than Winpak. It trades about -0.2 of its total potential returns per unit of risk. Winpak is currently generating about -0.05 per unit of volatility. If you would invest 4,952 in Winpak on September 3, 2024 and sell it today you would lose (100.00) from holding Winpak or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Office Real vs. Winpak
Performance |
| Timeline |
| Dream Office Real |
| Winpak |
Dream Office and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Office and Winpak
The main advantage of trading using opposite Dream Office and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Office position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.| Dream Office vs. KDA Group | Dream Office vs. BMO Aggregate Bond | Dream Office vs. Terreno Resources Corp | Dream Office vs. iShares Canadian HYBrid |
| Winpak vs. QC Copper and | Winpak vs. Mako Mining Corp | Winpak vs. Economic Investment Trust | Winpak vs. Faction Investment 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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