Correlation Between Dream Industrial and Gulf Pacific
Can any of the company-specific risk be diversified away by investing in both Dream Industrial and Gulf Pacific 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 Gulf Pacific 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 Gulf Pacific Equities, you can compare the effects of market volatilities on Dream Industrial and Gulf Pacific 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 Gulf Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Industrial and Gulf Pacific.
Diversification Opportunities for Dream Industrial and Gulf Pacific
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Gulf is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dream Industrial Real and Gulf Pacific Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Pacific Equities 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 Gulf Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Pacific Equities has no effect on the direction of Dream Industrial i.e., Dream Industrial and Gulf Pacific go up and down completely randomly.
Pair Corralation between Dream Industrial and Gulf Pacific
Assuming the 90 days trading horizon Dream Industrial is expected to generate 2.03 times less return on investment than Gulf Pacific. In addition to that, Dream Industrial is 1.06 times more volatile than Gulf Pacific Equities. It trades about 0.03 of its total potential returns per unit of risk. Gulf Pacific Equities is currently generating about 0.07 per unit of volatility. If you would invest 44.00 in Gulf Pacific Equities on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Gulf Pacific Equities or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Industrial Real vs. Gulf Pacific Equities
Performance |
| Timeline |
| Dream Industrial Real |
| Gulf Pacific Equities |
Dream Industrial and Gulf Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Industrial and Gulf Pacific
The main advantage of trading using opposite Dream Industrial and Gulf Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Industrial position performs unexpectedly, Gulf Pacific 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 Gulf Pacific will offset losses from the drop in Gulf Pacific's 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 |
| Gulf Pacific vs. Morguard | Gulf Pacific vs. Melcor Developments | Gulf Pacific vs. Boardwalk Real Estate | Gulf Pacific vs. Genesis Land Development |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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