Correlation Between Primaris Retail and Open Text
Can any of the company-specific risk be diversified away by investing in both Primaris Retail and Open Text 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 Open Text 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 Open Text Corp, you can compare the effects of market volatilities on Primaris Retail and Open Text 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 Open Text. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and Open Text.
Diversification Opportunities for Primaris Retail and Open Text
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Primaris and Open is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and Open Text Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Text Corp 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 Open Text. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Text Corp has no effect on the direction of Primaris Retail i.e., Primaris Retail and Open Text go up and down completely randomly.
Pair Corralation between Primaris Retail and Open Text
Assuming the 90 days trading horizon Primaris Retail RE is expected to generate 0.25 times more return on investment than Open Text. However, Primaris Retail RE is 4.01 times less risky than Open Text. It trades about 0.02 of its potential returns per unit of risk. Open Text Corp is currently generating about -0.19 per unit of risk. If you would invest 1,584 in Primaris Retail RE on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Primaris Retail RE or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primaris Retail RE vs. Open Text Corp
Performance |
| Timeline |
| Primaris Retail RE |
| Open Text Corp |
Primaris Retail and Open Text Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primaris Retail and Open Text
The main advantage of trading using opposite Primaris Retail and Open Text positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail position performs unexpectedly, Open Text 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 Open Text will offset losses from the drop in Open Text'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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