Correlation Between Reitmans (Canada) and Reitmans (Canada)
Can any of the company-specific risk be diversified away by investing in both Reitmans (Canada) 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 (Canada) 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 Limited, you can compare the effects of market volatilities on Reitmans (Canada) 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 (Canada) with a short position of Reitmans (Canada). Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitmans (Canada) and Reitmans (Canada).
Diversification Opportunities for Reitmans (Canada) and Reitmans (Canada)
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reitmans and Reitmans is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Reitmans Limited and Reitmans Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans (Canada) and Reitmans (Canada) 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 (Canada) i.e., Reitmans (Canada) and Reitmans (Canada) go up and down completely randomly.
Pair Corralation between Reitmans (Canada) and Reitmans (Canada)
Assuming the 90 days horizon Reitmans Limited is expected to under-perform the Reitmans (Canada). In addition to that, Reitmans (Canada) is 1.31 times more volatile than Reitmans Limited. It trades about -0.11 of its total potential returns per unit of risk. Reitmans Limited is currently generating about 0.21 per unit of volatility. If you would invest 197.00 in Reitmans Limited on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Reitmans Limited or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reitmans Limited vs. Reitmans Limited
Performance |
| Timeline |
| Reitmans (Canada) |
| Reitmans (Canada) |
Reitmans (Canada) and Reitmans (Canada) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reitmans (Canada) and Reitmans (Canada)
The main advantage of trading using opposite Reitmans (Canada) and Reitmans (Canada) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitmans (Canada) 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 (Canada) vs. Alsea SAB de | Reitmans (Canada) vs. Marstons PLC | Reitmans (Canada) vs. Bagger Daves Burger | Reitmans (Canada) vs. Marstons PLC |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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