Correlation Between Dream Industrial and RioCan Real
Can any of the company-specific risk be diversified away by investing in both Dream Industrial and RioCan 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 Industrial and RioCan Real 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 RioCan Real Estate, you can compare the effects of market volatilities on Dream Industrial and RioCan 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 Industrial with a short position of RioCan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Industrial and RioCan Real.
Diversification Opportunities for Dream Industrial and RioCan Real
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dream and RioCan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dream Industrial Real and RioCan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RioCan Real Estate 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 RioCan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RioCan Real Estate has no effect on the direction of Dream Industrial i.e., Dream Industrial and RioCan Real go up and down completely randomly.
Pair Corralation between Dream Industrial and RioCan Real
Assuming the 90 days trading horizon Dream Industrial Real is expected to under-perform the RioCan Real. In addition to that, Dream Industrial is 1.13 times more volatile than RioCan Real Estate. It trades about -0.03 of its total potential returns per unit of risk. RioCan Real Estate is currently generating about 0.16 per unit of volatility. If you would invest 1,870 in RioCan Real Estate on November 27, 2024 and sell it today you would earn a total of 86.00 from holding RioCan Real Estate or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Industrial Real vs. RioCan Real Estate
Performance |
| Timeline |
| Dream Industrial Real |
| RioCan Real Estate |
Dream Industrial and RioCan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Industrial and RioCan Real
The main advantage of trading using opposite Dream Industrial and RioCan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Industrial position performs unexpectedly, RioCan 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 RioCan Real will offset losses from the drop in RioCan Real'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 |
| RioCan Real vs. SmartCentres Real Estate | RioCan Real vs. HR Real Estate | RioCan Real vs. Fortis Inc | RioCan Real vs. Enbridge |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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