Correlation Between Granite Real and Canadian Apartment
Can any of the company-specific risk be diversified away by investing in both Granite Real and Canadian Apartment 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 Canadian Apartment 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 Canadian Apartment Properties, you can compare the effects of market volatilities on Granite Real and Canadian Apartment 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 Canadian Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and Canadian Apartment.
Diversification Opportunities for Granite Real and Canadian Apartment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Granite and Canadian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and Canadian Apartment Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Apartment 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 Canadian Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Apartment has no effect on the direction of Granite Real i.e., Granite Real and Canadian Apartment go up and down completely randomly.
Pair Corralation between Granite Real and Canadian Apartment
Assuming the 90 days trading horizon Granite Real Estate is expected to generate 1.17 times more return on investment than Canadian Apartment. However, Granite Real is 1.17 times more volatile than Canadian Apartment Properties. It trades about -0.13 of its potential returns per unit of risk. Canadian Apartment Properties is currently generating about -0.5 per unit of risk. If you would invest 7,632 in Granite Real Estate on August 24, 2024 and sell it today you would lose (253.00) from holding Granite Real Estate or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Real Estate vs. Canadian Apartment Properties
Performance |
| Timeline |
| Granite Real Estate |
| Canadian Apartment |
Granite Real and Canadian Apartment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and Canadian Apartment
The main advantage of trading using opposite Granite Real and Canadian Apartment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real position performs unexpectedly, Canadian Apartment 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 Canadian Apartment will offset losses from the drop in Canadian Apartment'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 |
| Canadian Apartment vs. Allied Properties Real | Canadian Apartment vs. Granite Real Estate | Canadian Apartment vs. Boardwalk Real Estate | Canadian Apartment vs. HR Real Estate |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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