Correlation Between Granite Real and CT Real
Can any of the company-specific risk be diversified away by investing in both Granite Real and CT 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 CT 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 CT Real Estate, you can compare the effects of market volatilities on Granite Real and CT 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 CT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and CT Real.
Diversification Opportunities for Granite Real and CT Real
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Granite and CRT-UN is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and CT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT 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 CT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Real Estate has no effect on the direction of Granite Real i.e., Granite Real and CT Real go up and down completely randomly.
Pair Corralation between Granite Real and CT Real
Assuming the 90 days trading horizon Granite Real is expected to generate 1.23 times less return on investment than CT Real. In addition to that, Granite Real is 1.05 times more volatile than CT Real Estate. It trades about 0.06 of its total potential returns per unit of risk. CT Real Estate is currently generating about 0.07 per unit of volatility. If you would invest 1,197 in CT Real Estate on August 25, 2024 and sell it today you would earn a total of 299.00 from holding CT Real Estate or generate 24.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Real Estate vs. CT Real Estate
Performance |
| Timeline |
| Granite Real Estate |
| CT Real Estate |
Granite Real and CT Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and CT Real
The main advantage of trading using opposite Granite Real and CT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real position performs unexpectedly, CT 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 CT Real will offset losses from the drop in CT 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 |
| CT Real vs. Choice Properties Real | CT Real vs. Crombie Real Estate | CT Real vs. Granite Real Estate | CT 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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