Correlation Between First Capital and BSR Real
Can any of the company-specific risk be diversified away by investing in both First Capital and BSR 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 First Capital and BSR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Capital Real and BSR Real Estate, you can compare the effects of market volatilities on First Capital and BSR 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 First Capital with a short position of BSR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Capital and BSR Real.
Diversification Opportunities for First Capital and BSR Real
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and BSR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding First Capital Real and BSR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSR Real Estate and First Capital 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 First Capital Real are associated (or correlated) with BSR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSR Real Estate has no effect on the direction of First Capital i.e., First Capital and BSR Real go up and down completely randomly.
Pair Corralation between First Capital and BSR Real
Assuming the 90 days trading horizon First Capital Real is expected to generate 0.83 times more return on investment than BSR Real. However, First Capital Real is 1.21 times less risky than BSR Real. It trades about 0.17 of its potential returns per unit of risk. BSR Real Estate is currently generating about 0.12 per unit of risk. If you would invest 1,447 in First Capital Real on September 2, 2024 and sell it today you would earn a total of 347.00 from holding First Capital Real or generate 23.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Capital Real vs. BSR Real Estate
Performance |
| Timeline |
| First Capital Real |
| BSR Real Estate |
First Capital and BSR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Capital and BSR Real
The main advantage of trading using opposite First Capital and BSR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Capital position performs unexpectedly, BSR 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 BSR Real will offset losses from the drop in BSR Real's long position.| First Capital vs. Slate Office REIT | First Capital vs. Automotive Properties Real | First Capital vs. BTB Real Estate | First Capital vs. CT Real Estate |
| BSR Real vs. European Residential Real | BSR Real vs. Minto Apartment Real | BSR Real vs. BSR Real Estate | BSR Real vs. Morguard North American |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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