Correlation Between Granite Real and Boardwalk Real
Can any of the company-specific risk be diversified away by investing in both Granite Real and Boardwalk 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 Granite Real and Boardwalk Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Real Estate and Boardwalk Real Estate, you can compare the effects of market volatilities on Granite Real and Boardwalk 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 Granite Real with a short position of Boardwalk Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and Boardwalk Real.
Diversification Opportunities for Granite Real and Boardwalk Real
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Granite and Boardwalk is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and Boardwalk Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boardwalk Real Estate and Granite Real 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 Granite Real Estate are associated (or correlated) with Boardwalk Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boardwalk Real Estate has no effect on the direction of Granite Real i.e., Granite Real and Boardwalk Real go up and down completely randomly.
Pair Corralation between Granite Real and Boardwalk Real
Assuming the 90 days trading horizon Granite Real is expected to generate 20.33 times less return on investment than Boardwalk Real. In addition to that, Granite Real is 1.05 times more volatile than Boardwalk Real Estate. It trades about 0.0 of its total potential returns per unit of risk. Boardwalk Real Estate is currently generating about 0.04 per unit of volatility. If you would invest 6,102 in Boardwalk Real Estate on August 28, 2024 and sell it today you would earn a total of 1,093 from holding Boardwalk Real Estate or generate 17.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Real Estate vs. Boardwalk Real Estate
Performance |
| Timeline |
| Granite Real Estate |
| Boardwalk Real Estate |
Granite Real and Boardwalk Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and Boardwalk Real
The main advantage of trading using opposite Granite Real and Boardwalk Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real position performs unexpectedly, Boardwalk 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 Boardwalk Real will offset losses from the drop in Boardwalk Real's long position.| Granite Real vs. Canadian Apartment Properties | Granite Real vs. Dream Industrial Real | Granite Real vs. Allied Properties Real | Granite Real vs. Killam Apartment Real |
| Boardwalk Real vs. Canadian Apartment Properties | Boardwalk Real vs. Dream Office Real | Boardwalk Real vs. Artis Real Estate | Boardwalk Real vs. Allied Properties Real |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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