Correlation Between Dream Industrial and Automotive Properties
Can any of the company-specific risk be diversified away by investing in both Dream Industrial and Automotive Properties 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 Industrial and Automotive Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Industrial Real and Automotive Properties Real, you can compare the effects of market volatilities on Dream Industrial and Automotive Properties 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 Industrial with a short position of Automotive Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Industrial and Automotive Properties.
Diversification Opportunities for Dream Industrial and Automotive Properties
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dream and Automotive is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dream Industrial Real and Automotive Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Properties and Dream Industrial 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 Industrial Real are associated (or correlated) with Automotive Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Properties has no effect on the direction of Dream Industrial i.e., Dream Industrial and Automotive Properties go up and down completely randomly.
Pair Corralation between Dream Industrial and Automotive Properties
Assuming the 90 days trading horizon Dream Industrial is expected to generate 3.45 times less return on investment than Automotive Properties. But when comparing it to its historical volatility, Dream Industrial Real is 1.02 times less risky than Automotive Properties. It trades about 0.03 of its potential returns per unit of risk. Automotive Properties Real is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 983.00 in Automotive Properties Real on September 1, 2024 and sell it today you would earn a total of 161.00 from holding Automotive Properties Real or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Industrial Real vs. Automotive Properties Real
Performance |
| Timeline |
| Dream Industrial Real |
| Automotive Properties |
Dream Industrial and Automotive Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Industrial and Automotive Properties
The main advantage of trading using opposite Dream Industrial and Automotive Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Industrial position performs unexpectedly, Automotive Properties 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 Automotive Properties will offset losses from the drop in Automotive Properties' long position.| Dream Industrial vs. Granite Real Estate | Dream Industrial vs. NorthWest Healthcare Properties | Dream Industrial vs. Choice Properties Real | Dream Industrial vs. Canadian Apartment Properties |
| Automotive Properties vs. Inovalis Real Estate | Automotive Properties vs. Slate Office REIT | Automotive Properties vs. Dream Industrial Real | Automotive Properties vs. BTB 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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