Correlation Between Pro Real and Morguard North
Can any of the company-specific risk be diversified away by investing in both Pro Real and Morguard North 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 Morguard North 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 Morguard North American, you can compare the effects of market volatilities on Pro Real and Morguard North 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 Morguard North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pro Real and Morguard North.
Diversification Opportunities for Pro Real and Morguard North
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pro and Morguard is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pro Real Estate and Morguard North American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morguard North American 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 Morguard North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morguard North American has no effect on the direction of Pro Real i.e., Pro Real and Morguard North go up and down completely randomly.
Pair Corralation between Pro Real and Morguard North
Assuming the 90 days trading horizon Pro Real is expected to generate 2.17 times less return on investment than Morguard North. In addition to that, Pro Real is 1.02 times more volatile than Morguard North American. It trades about 0.02 of its total potential returns per unit of risk. Morguard North American is currently generating about 0.04 per unit of volatility. If you would invest 1,481 in Morguard North American on September 3, 2024 and sell it today you would earn a total of 377.00 from holding Morguard North American or generate 25.46% 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. Morguard North American
Performance |
| Timeline |
| Pro Real Estate |
| Morguard North American |
Pro Real and Morguard North Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pro Real and Morguard North
The main advantage of trading using opposite Pro Real and Morguard North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pro Real position performs unexpectedly, Morguard North 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 Morguard North will offset losses from the drop in Morguard North's long position.| Pro Real vs. BTB Real Estate | Pro Real vs. Slate Office REIT | Pro Real vs. Nexus Real Estate | Pro Real vs. True North Commercial |
| Morguard North vs. Morguard Real Estate | Morguard North vs. Killam Apartment Real | Morguard North vs. InterRent Real Estate | Morguard North vs. Minto Apartment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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