Correlation Between Riocan REIT and Choice Properties
Can any of the company-specific risk be diversified away by investing in both Riocan REIT and Choice Properties 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 Riocan REIT and Choice Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riocan REIT and Choice Properties Real, you can compare the effects of market volatilities on Riocan REIT and Choice Properties 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 Riocan REIT with a short position of Choice Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riocan REIT and Choice Properties.
Diversification Opportunities for Riocan REIT and Choice Properties
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Riocan and Choice is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Riocan REIT and Choice Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Properties Real and Riocan REIT 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 Riocan REIT are associated (or correlated) with Choice Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Properties Real has no effect on the direction of Riocan REIT i.e., Riocan REIT and Choice Properties go up and down completely randomly.
Pair Corralation between Riocan REIT and Choice Properties
Assuming the 90 days horizon Riocan REIT is expected to under-perform the Choice Properties. But the pink sheet apears to be less risky and, when comparing its historical volatility, Riocan REIT is 7.44 times less risky than Choice Properties. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Choice Properties Real is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 936.00 in Choice Properties Real on November 3, 2024 and sell it today you would lose (47.00) from holding Choice Properties Real or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Riocan REIT vs. Choice Properties Real
Performance |
| Timeline |
| Riocan REIT |
| Choice Properties Real |
Riocan REIT and Choice Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riocan REIT and Choice Properties
The main advantage of trading using opposite Riocan REIT and Choice Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riocan REIT position performs unexpectedly, Choice Properties 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 Choice Properties will offset losses from the drop in Choice Properties' long position.| Riocan REIT vs. Choice Properties Real | Riocan REIT vs. Firm Capital Property | Riocan REIT vs. Slate Grocery REIT | Riocan REIT vs. Smart REIT |
| Choice Properties vs. Firm Capital Property | Choice Properties vs. Riocan REIT | Choice Properties vs. Smart REIT | Choice Properties vs. Primaris Real Estate |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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