Correlation Between Primaris Retail and HR Real
Can any of the company-specific risk be diversified away by investing in both Primaris Retail and HR Real 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 HR Real 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 HR Real Estate, you can compare the effects of market volatilities on Primaris Retail and HR Real 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 HR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and HR Real.
Diversification Opportunities for Primaris Retail and HR Real
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Primaris and HR-UN is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and HR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Real Estate 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 HR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Real Estate has no effect on the direction of Primaris Retail i.e., Primaris Retail and HR Real go up and down completely randomly.
Pair Corralation between Primaris Retail and HR Real
Assuming the 90 days trading horizon Primaris Retail RE is expected to generate 0.58 times more return on investment than HR Real. However, Primaris Retail RE is 1.71 times less risky than HR Real. It trades about 0.05 of its potential returns per unit of risk. HR Real Estate is currently generating about -0.29 per unit of risk. If you would invest 1,574 in Primaris Retail RE on August 30, 2024 and sell it today you would earn a total of 11.00 from holding Primaris Retail RE or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primaris Retail RE vs. HR Real Estate
Performance |
| Timeline |
| Primaris Retail RE |
| HR Real Estate |
Primaris Retail and HR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primaris Retail and HR Real
The main advantage of trading using opposite Primaris Retail and HR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail position performs unexpectedly, HR Real 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 HR Real will offset losses from the drop in HR Real's long position.| Primaris Retail vs. SmartCentres Real Estate | Primaris Retail vs. Dream Industrial Real | Primaris Retail vs. RioCan Real Estate | Primaris Retail vs. Algonquin Power Utilities |
| HR Real vs. RioCan Real Estate | HR Real vs. Canadian Apartment Properties | HR Real vs. SmartCentres Real Estate | HR Real vs. Allied Properties 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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