Correlation Between Reitmans and Reitmans Canada
Can any of the company-specific risk be diversified away by investing in both Reitmans and Reitmans Canada 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 Reitmans and Reitmans Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reitmans Limited and Reitmans Canada, you can compare the effects of market volatilities on Reitmans and Reitmans Canada 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 Reitmans with a short position of Reitmans Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitmans and Reitmans Canada.
Diversification Opportunities for Reitmans and Reitmans Canada
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Reitmans and Reitmans is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Reitmans Limited and Reitmans Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans Canada and Reitmans 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 Reitmans Limited are associated (or correlated) with Reitmans Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans Canada has no effect on the direction of Reitmans i.e., Reitmans and Reitmans Canada go up and down completely randomly.
Pair Corralation between Reitmans and Reitmans Canada
Assuming the 90 days trading horizon Reitmans Limited is expected to under-perform the Reitmans Canada. But the stock apears to be less risky and, when comparing its historical volatility, Reitmans Limited is 2.24 times less risky than Reitmans Canada. The stock trades about -0.06 of its potential returns per unit of risk. The Reitmans Canada is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 278.00 in Reitmans Canada on September 13, 2024 and sell it today you would lose (4.00) from holding Reitmans Canada or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reitmans Limited vs. Reitmans Canada
Performance |
| Timeline |
| Reitmans Limited |
| Reitmans Canada |
Reitmans and Reitmans Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reitmans and Reitmans Canada
The main advantage of trading using opposite Reitmans and Reitmans Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitmans position performs unexpectedly, Reitmans Canada 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 Reitmans Canada will offset losses from the drop in Reitmans Canada's long position.| Reitmans vs. Reitmans Canada | Reitmans vs. Lite Access Technologies | Reitmans vs. Legend Power Systems | Reitmans vs. Supremex |
| Reitmans Canada vs. Canada Goose Holdings | Reitmans Canada vs. Spin Master Corp | Reitmans Canada vs. Aritzia | Reitmans Canada vs. iShares Canadian HYBrid |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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