Correlation Between Triple Flag and Dream Office
Can any of the company-specific risk be diversified away by investing in both Triple Flag and Dream Office 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 Triple Flag and Dream Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triple Flag Precious and Dream Office Real, you can compare the effects of market volatilities on Triple Flag and Dream Office 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 Triple Flag with a short position of Dream Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triple Flag and Dream Office.
Diversification Opportunities for Triple Flag and Dream Office
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Triple and Dream is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Triple Flag Precious and Dream Office Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Office Real and Triple Flag 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 Triple Flag Precious are associated (or correlated) with Dream Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Office Real has no effect on the direction of Triple Flag i.e., Triple Flag and Dream Office go up and down completely randomly.
Pair Corralation between Triple Flag and Dream Office
Assuming the 90 days trading horizon Triple Flag Precious is expected to generate 0.86 times more return on investment than Dream Office. However, Triple Flag Precious is 1.16 times less risky than Dream Office. It trades about -0.26 of its potential returns per unit of risk. Dream Office Real is currently generating about -0.24 per unit of risk. If you would invest 2,347 in Triple Flag Precious on October 8, 2024 and sell it today you would lose (165.00) from holding Triple Flag Precious or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triple Flag Precious vs. Dream Office Real
Performance |
| Timeline |
| Triple Flag Precious |
| Dream Office Real |
Triple Flag and Dream Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triple Flag and Dream Office
The main advantage of trading using opposite Triple Flag and Dream Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triple Flag position performs unexpectedly, Dream Office 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 Dream Office will offset losses from the drop in Dream Office's long position.| Triple Flag vs. First Majestic Silver | Triple Flag vs. Ivanhoe Energy | Triple Flag vs. Flinders Resources Limited | Triple Flag vs. Orezone Gold Corp |
| Dream Office vs. Artis Real Estate | Dream Office vs. Boardwalk Real Estate | Dream Office vs. Allied Properties Real | Dream Office vs. HR 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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