Correlation Between Morguard Real and Cineplex
Can any of the company-specific risk be diversified away by investing in both Morguard Real and Cineplex 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 Morguard Real and Cineplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Morguard Real Estate and Cineplex, you can compare the effects of market volatilities on Morguard Real and Cineplex 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 Morguard Real with a short position of Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morguard Real and Cineplex.
Diversification Opportunities for Morguard Real and Cineplex
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Morguard and Cineplex is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Morguard Real Estate and Cineplex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineplex and Morguard 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 Morguard Real Estate are associated (or correlated) with Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cineplex has no effect on the direction of Morguard Real i.e., Morguard Real and Cineplex go up and down completely randomly.
Pair Corralation between Morguard Real and Cineplex
Assuming the 90 days trading horizon Morguard Real Estate is expected to under-perform the Cineplex. But the stock apears to be less risky and, when comparing its historical volatility, Morguard Real Estate is 1.44 times less risky than Cineplex. The stock trades about -0.08 of its potential returns per unit of risk. The Cineplex is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,037 in Cineplex on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Cineplex or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Morguard Real Estate vs. Cineplex
Performance |
| Timeline |
| Morguard Real Estate |
| Cineplex |
Morguard Real and Cineplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Morguard Real and Cineplex
The main advantage of trading using opposite Morguard Real and Cineplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Morguard Real position performs unexpectedly, Cineplex 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 Cineplex will offset losses from the drop in Cineplex's long position.| Morguard Real vs. Morguard North American | Morguard Real vs. Crombie Real Estate | Morguard Real vs. Artis Real Estate | Morguard Real vs. Slate Office REIT |
| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
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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