Correlation Between Primaris Retail and TMX Group
Can any of the company-specific risk be diversified away by investing in both Primaris Retail and TMX Group 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 TMX Group 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 TMX Group Limited, you can compare the effects of market volatilities on Primaris Retail and TMX Group 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 TMX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and TMX Group.
Diversification Opportunities for Primaris Retail and TMX Group
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Primaris and TMX is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and TMX Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMX Group Limited 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 TMX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMX Group Limited has no effect on the direction of Primaris Retail i.e., Primaris Retail and TMX Group go up and down completely randomly.
Pair Corralation between Primaris Retail and TMX Group
Assuming the 90 days trading horizon Primaris Retail RE is expected to generate 0.84 times more return on investment than TMX Group. However, Primaris Retail RE is 1.19 times less risky than TMX Group. It trades about 0.16 of its potential returns per unit of risk. TMX Group Limited is currently generating about 0.11 per unit of risk. If you would invest 1,572 in Primaris Retail RE on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Primaris Retail RE or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primaris Retail RE vs. TMX Group Limited
Performance |
| Timeline |
| Primaris Retail RE |
| TMX Group Limited |
Primaris Retail and TMX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primaris Retail and TMX Group
The main advantage of trading using opposite Primaris Retail and TMX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primaris Retail position performs unexpectedly, TMX Group 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 TMX Group will offset losses from the drop in TMX Group'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 |
| TMX Group vs. Primaris Retail RE | TMX Group vs. Ocumetics Technology Corp | TMX Group vs. CVW CleanTech | TMX Group vs. Sparx Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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