Correlation Between HR Real and Canadian Net
Can any of the company-specific risk be diversified away by investing in both HR Real and Canadian Net 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 Canadian Net 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 Canadian Net Real, you can compare the effects of market volatilities on HR Real and Canadian Net 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 Canadian Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of HR Real and Canadian Net.
Diversification Opportunities for HR Real and Canadian Net
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HR-UN and Canadian is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding HR Real Estate and Canadian Net Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Net 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 Canadian Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Net Real has no effect on the direction of HR Real i.e., HR Real and Canadian Net go up and down completely randomly.
Pair Corralation between HR Real and Canadian Net
Assuming the 90 days trading horizon HR Real Estate is expected to under-perform the Canadian Net. But the stock apears to be less risky and, when comparing its historical volatility, HR Real Estate is 1.09 times less risky than Canadian Net. The stock trades about -0.12 of its potential returns per unit of risk. The Canadian Net Real is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 532.00 in Canadian Net Real on September 15, 2024 and sell it today you would earn a total of 1.00 from holding Canadian Net Real or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HR Real Estate vs. Canadian Net Real
Performance |
| Timeline |
| HR Real Estate |
| Canadian Net Real |
HR Real and Canadian Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HR Real and Canadian Net
The main advantage of trading using opposite HR Real and Canadian Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HR Real position performs unexpectedly, Canadian Net 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 Canadian Net will offset losses from the drop in Canadian Net's long position.| HR Real vs. Canadian Apartment Properties | HR Real vs. Granite Real Estate | HR Real vs. Choice Properties Real | HR Real vs. Boardwalk Real Estate |
| Canadian Net vs. Canadian Apartment Properties | Canadian Net vs. Granite Real Estate | Canadian Net vs. Choice Properties Real | Canadian Net vs. HR 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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