Correlation Between Granite Real and InterRent Real
Can any of the company-specific risk be diversified away by investing in both Granite Real and InterRent 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 InterRent 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 InterRent Real Estate, you can compare the effects of market volatilities on Granite Real and InterRent 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 InterRent Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and InterRent Real.
Diversification Opportunities for Granite Real and InterRent Real
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Granite and InterRent is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and InterRent Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterRent 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 InterRent Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterRent Real Estate has no effect on the direction of Granite Real i.e., Granite Real and InterRent Real go up and down completely randomly.
Pair Corralation between Granite Real and InterRent Real
Assuming the 90 days trading horizon Granite Real Estate is expected to generate 0.98 times more return on investment than InterRent Real. However, Granite Real Estate is 1.02 times less risky than InterRent Real. It trades about 0.0 of its potential returns per unit of risk. InterRent Real Estate is currently generating about -0.02 per unit of risk. If you would invest 7,729 in Granite Real Estate on August 28, 2024 and sell it today you would lose (166.00) from holding Granite Real Estate or give up 2.15% 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. InterRent Real Estate
Performance |
| Timeline |
| Granite Real Estate |
| InterRent Real Estate |
Granite Real and InterRent Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and InterRent Real
The main advantage of trading using opposite Granite Real and InterRent Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real position performs unexpectedly, InterRent 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 InterRent Real will offset losses from the drop in InterRent 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 |
| InterRent Real vs. Killam Apartment Real | InterRent Real vs. Canadian Apartment Properties | InterRent Real vs. Granite Real Estate | InterRent Real vs. Boardwalk 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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