Correlation Between Granite Real and Morguard
Can any of the company-specific risk be diversified away by investing in both Granite Real and Morguard 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 Morguard 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 Morguard, you can compare the effects of market volatilities on Granite Real and Morguard 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 Morguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and Morguard.
Diversification Opportunities for Granite Real and Morguard
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Granite and Morguard is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and Morguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morguard 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 Morguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morguard has no effect on the direction of Granite Real i.e., Granite Real and Morguard go up and down completely randomly.
Pair Corralation between Granite Real and Morguard
Assuming the 90 days trading horizon Granite Real Estate is expected to under-perform the Morguard. But the stock apears to be less risky and, when comparing its historical volatility, Granite Real Estate is 1.47 times less risky than Morguard. The stock trades about -0.2 of its potential returns per unit of risk. The Morguard is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,875 in Morguard on September 13, 2024 and sell it today you would earn a total of 86.00 from holding Morguard or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Real Estate vs. Morguard
Performance |
| Timeline |
| Granite Real Estate |
| Morguard |
Granite Real and Morguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and Morguard
The main advantage of trading using opposite Granite Real and Morguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real position performs unexpectedly, Morguard 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 Morguard will offset losses from the drop in Morguard's long position.| Granite Real vs. Canadian Apartment Properties | Granite Real vs. Choice Properties Real | Granite Real vs. HR Real Estate | Granite Real vs. Boardwalk Real Estate |
| Morguard vs. Morguard Real Estate | Morguard vs. Mainstreet Equity Corp | Morguard vs. Morguard North American | Morguard vs. Melcor Developments |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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