Correlation Between HR Real and Choice Properties
Can any of the company-specific risk be diversified away by investing in both HR Real and Choice Properties 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 HR Real and Choice Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HR Real Estate and Choice Properties Real, you can compare the effects of market volatilities on HR Real and Choice Properties 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 HR Real with a short position of Choice Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of HR Real and Choice Properties.
Diversification Opportunities for HR Real and Choice Properties
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HR-UN and Choice is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding HR Real Estate and Choice Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Properties Real and HR 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 HR Real Estate are associated (or correlated) with Choice Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Properties Real has no effect on the direction of HR Real i.e., HR Real and Choice Properties go up and down completely randomly.
Pair Corralation between HR Real and Choice Properties
Assuming the 90 days trading horizon HR Real Estate is expected to under-perform the Choice Properties. In addition to that, HR Real is 1.25 times more volatile than Choice Properties Real. It trades about -0.01 of its total potential returns per unit of risk. Choice Properties Real is currently generating about 0.01 per unit of volatility. If you would invest 1,328 in Choice Properties Real on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Choice Properties Real or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HR Real Estate vs. Choice Properties Real
Performance |
| Timeline |
| HR Real Estate |
| Choice Properties Real |
HR Real and Choice Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HR Real and Choice Properties
The main advantage of trading using opposite HR Real and Choice Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HR Real position performs unexpectedly, Choice Properties 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 Choice Properties will offset losses from the drop in Choice Properties' long position.| HR Real vs. RioCan Real Estate | HR Real vs. Canadian Apartment Properties | HR Real vs. SmartCentres Real Estate | HR Real vs. Allied Properties Real |
| Choice Properties vs. CT Real Estate | Choice Properties vs. Crombie Real Estate | Choice Properties vs. Allied Properties Real | Choice Properties vs. Dream Industrial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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