Correlation Between Granite Real and HR Real
Can any of the company-specific risk be diversified away by investing in both Granite Real and HR 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 HR 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 HR Real Estate, you can compare the effects of market volatilities on Granite Real and HR 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 HR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and HR Real.
Diversification Opportunities for Granite Real and HR Real
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Granite and HR-UN is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and HR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR 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 HR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Real Estate has no effect on the direction of Granite Real i.e., Granite Real and HR Real go up and down completely randomly.
Pair Corralation between Granite Real and HR Real
Assuming the 90 days trading horizon Granite Real is expected to generate 8.85 times less return on investment than HR Real. But when comparing it to its historical volatility, Granite Real Estate is 1.04 times less risky than HR Real. It trades about 0.0 of its potential returns per unit of risk. HR Real Estate is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 951.00 in HR Real Estate on August 28, 2024 and sell it today you would earn a total of 49.00 from holding HR Real Estate or generate 5.15% 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. HR Real Estate
Performance |
| Timeline |
| Granite Real Estate |
| HR Real Estate |
Granite Real and HR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and HR Real
The main advantage of trading using opposite Granite Real and HR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real position performs unexpectedly, HR 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 HR Real will offset losses from the drop in HR 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 |
| HR Real vs. RioCan Real Estate | HR Real vs. Canadian Apartment Properties | HR Real vs. SmartCentres Real Estate | HR 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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