Correlation Between Brompton Lifeco and Canadian Apartment
Can any of the company-specific risk be diversified away by investing in both Brompton Lifeco and Canadian Apartment 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 Brompton Lifeco and Canadian Apartment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Lifeco Split and Canadian Apartment Properties, you can compare the effects of market volatilities on Brompton Lifeco and Canadian Apartment 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 Brompton Lifeco with a short position of Canadian Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Lifeco and Canadian Apartment.
Diversification Opportunities for Brompton Lifeco and Canadian Apartment
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brompton and Canadian is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Lifeco Split and Canadian Apartment Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Apartment and Brompton Lifeco 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 Brompton Lifeco Split are associated (or correlated) with Canadian Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Apartment has no effect on the direction of Brompton Lifeco i.e., Brompton Lifeco and Canadian Apartment go up and down completely randomly.
Pair Corralation between Brompton Lifeco and Canadian Apartment
Assuming the 90 days trading horizon Brompton Lifeco Split is expected to generate 1.08 times more return on investment than Canadian Apartment. However, Brompton Lifeco is 1.08 times more volatile than Canadian Apartment Properties. It trades about 0.23 of its potential returns per unit of risk. Canadian Apartment Properties is currently generating about -0.09 per unit of risk. If you would invest 973.00 in Brompton Lifeco Split on September 12, 2024 and sell it today you would earn a total of 57.00 from holding Brompton Lifeco Split or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton Lifeco Split vs. Canadian Apartment Properties
Performance |
| Timeline |
| Brompton Lifeco Split |
| Canadian Apartment |
Brompton Lifeco and Canadian Apartment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton Lifeco and Canadian Apartment
The main advantage of trading using opposite Brompton Lifeco and Canadian Apartment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Lifeco position performs unexpectedly, Canadian Apartment 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 Apartment will offset losses from the drop in Canadian Apartment's long position.| Brompton Lifeco vs. Life Banc Split | Brompton Lifeco vs. Brompton Split Banc | Brompton Lifeco vs. Dividend Growth Split | Brompton Lifeco vs. Dividend 15 Split |
| Canadian Apartment vs. InterRent Real Estate | Canadian Apartment vs. Granite Real Estate | Canadian Apartment vs. Crombie Real Estate | Canadian Apartment 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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