Correlation Between Sienna Senior and HR Real
Can any of the company-specific risk be diversified away by investing in both Sienna Senior and HR 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 Sienna Senior and HR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sienna Senior Living and HR Real Estate, you can compare the effects of market volatilities on Sienna Senior and HR 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 Sienna Senior with a short position of HR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sienna Senior and HR Real.
Diversification Opportunities for Sienna Senior and HR Real
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sienna and HR-UN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sienna Senior Living and HR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Real Estate and Sienna Senior 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 Sienna Senior Living are associated (or correlated) with HR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Real Estate has no effect on the direction of Sienna Senior i.e., Sienna Senior and HR Real go up and down completely randomly.
Pair Corralation between Sienna Senior and HR Real
Assuming the 90 days trading horizon Sienna Senior Living is expected to generate 1.04 times more return on investment than HR Real. However, Sienna Senior is 1.04 times more volatile than HR Real Estate. It trades about 0.13 of its potential returns per unit of risk. HR Real Estate is currently generating about 0.06 per unit of risk. If you would invest 1,262 in Sienna Senior Living on September 1, 2024 and sell it today you would earn a total of 436.00 from holding Sienna Senior Living or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Sienna Senior Living vs. HR Real Estate
Performance |
| Timeline |
| Sienna Senior Living |
| HR Real Estate |
Sienna Senior and HR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sienna Senior and HR Real
The main advantage of trading using opposite Sienna Senior and HR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sienna Senior position performs unexpectedly, HR 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 HR Real will offset losses from the drop in HR Real's long position.| Sienna Senior vs. Extendicare | Sienna Senior vs. Chartwell Retirement Residences | Sienna Senior vs. NorthWest Healthcare Properties | Sienna Senior vs. Dream Industrial Real |
| HR Real vs. RioCan Real Estate | HR Real vs. Canadian Apartment Properties | HR Real vs. SmartCentres Real Estate | HR Real vs. Allied Properties 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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