Correlation Between Pro Real and BSR Real
Can any of the company-specific risk be diversified away by investing in both Pro Real and BSR 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 Pro Real and BSR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pro Real Estate and BSR Real Estate, you can compare the effects of market volatilities on Pro Real and BSR 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 Pro Real with a short position of BSR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Real and BSR Real.
Diversification Opportunities for Pro Real and BSR Real
Very weak diversification
The 3 months correlation between Pro and BSR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pro Real Estate and BSR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSR Real Estate and Pro 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 Pro Real Estate are associated (or correlated) with BSR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSR Real Estate has no effect on the direction of Pro Real i.e., Pro Real and BSR Real go up and down completely randomly.
Pair Corralation between Pro Real and BSR Real
Assuming the 90 days trading horizon Pro Real Estate is expected to under-perform the BSR Real. But the stock apears to be less risky and, when comparing its historical volatility, Pro Real Estate is 1.81 times less risky than BSR Real. The stock trades about -0.06 of its potential returns per unit of risk. The BSR Real Estate is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,645 in BSR Real Estate on December 1, 2024 and sell it today you would earn a total of 203.00 from holding BSR Real Estate or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pro Real Estate vs. BSR Real Estate
Performance |
| Timeline |
| Pro Real Estate |
| BSR Real Estate |
Pro Real and BSR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Real and BSR Real
The main advantage of trading using opposite Pro Real and BSR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Real position performs unexpectedly, BSR 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 BSR Real will offset losses from the drop in BSR Real's long position.| Pro Real vs. BTB Real Estate | Pro Real vs. Nexus Real Estate | Pro Real vs. True North Commercial | Pro Real vs. Inovalis Real Estate |
| BSR Real vs. European Residential Real | BSR Real vs. Minto Apartment Real | BSR Real vs. BSR Real Estate | BSR Real vs. Morguard North American |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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