Correlation Between Primaris Retail and Algoma Steel
Can any of the company-specific risk be diversified away by investing in both Primaris Retail and Algoma Steel 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 Primaris Retail and Algoma Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primaris Retail RE and Algoma Steel Group, you can compare the effects of market volatilities on Primaris Retail and Algoma Steel 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 Primaris Retail with a short position of Algoma Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and Algoma Steel.
Diversification Opportunities for Primaris Retail and Algoma Steel
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Primaris and Algoma is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and Algoma Steel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algoma Steel Group and Primaris Retail 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 Primaris Retail RE are associated (or correlated) with Algoma Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algoma Steel Group has no effect on the direction of Primaris Retail i.e., Primaris Retail and Algoma Steel go up and down completely randomly.
Pair Corralation between Primaris Retail and Algoma Steel
Assuming the 90 days trading horizon Primaris Retail RE is expected to generate 0.71 times more return on investment than Algoma Steel. However, Primaris Retail RE is 1.42 times less risky than Algoma Steel. It trades about 0.23 of its potential returns per unit of risk. Algoma Steel Group is currently generating about -0.43 per unit of risk. If you would invest 1,453 in Primaris Retail RE on November 27, 2024 and sell it today you would earn a total of 90.00 from holding Primaris Retail RE or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primaris Retail RE vs. Algoma Steel Group
Performance |
| Timeline |
| Primaris Retail RE |
| Algoma Steel Group |
Primaris Retail and Algoma Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primaris Retail and Algoma Steel
The main advantage of trading using opposite Primaris Retail and Algoma Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail position performs unexpectedly, Algoma Steel 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 Algoma Steel will offset losses from the drop in Algoma Steel's long position.| Primaris Retail vs. HR Real Estate | Primaris Retail vs. Dream Office Real | Primaris Retail vs. Artis Real Estate | Primaris Retail vs. Boardwalk Real Estate |
| Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Champion Iron | Algoma Steel vs. Ero Copper Corp | Algoma Steel vs. West Fraser Timber |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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