Correlation Between Grand City and Maui Land
Can any of the company-specific risk be diversified away by investing in both Grand City and Maui Land 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 Grand City and Maui Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand City Properties and Maui Land Pineapple, you can compare the effects of market volatilities on Grand City and Maui Land 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 Grand City with a short position of Maui Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand City and Maui Land.
Diversification Opportunities for Grand City and Maui Land
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grand and Maui is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Grand City Properties and Maui Land Pineapple in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maui Land Pineapple and Grand City 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 Grand City Properties are associated (or correlated) with Maui Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maui Land Pineapple has no effect on the direction of Grand City i.e., Grand City and Maui Land go up and down completely randomly.
Pair Corralation between Grand City and Maui Land
Assuming the 90 days horizon Grand City Properties is expected to under-perform the Maui Land. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grand City Properties is 1.21 times less risky than Maui Land. The pink sheet trades about -0.29 of its potential returns per unit of risk. The Maui Land Pineapple is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,353 in Maui Land Pineapple on September 24, 2024 and sell it today you would lose (54.00) from holding Maui Land Pineapple or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Grand City Properties vs. Maui Land Pineapple
Performance |
| Timeline |
| Grand City Properties |
| Maui Land Pineapple |
Grand City and Maui Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand City and Maui Land
The main advantage of trading using opposite Grand City and Maui Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand City position performs unexpectedly, Maui Land 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 Maui Land will offset losses from the drop in Maui Land's long position.| Grand City vs. Asia Pptys | Grand City vs. Adler Group SA | Grand City vs. Ambase Corp | Grand City vs. Bridgemarq Real Estate |
| Maui Land vs. CareTrust REIT | Maui Land vs. Global Medical REIT | Maui Land vs. Universal Health Realty | Maui Land vs. Healthpeak Properties |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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