Correlation Between Western Investment and Dream Industrial
Can any of the company-specific risk be diversified away by investing in both Western Investment and Dream Industrial 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 Western Investment and Dream Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Investment and Dream Industrial Real, you can compare the effects of market volatilities on Western Investment and Dream Industrial 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 Western Investment with a short position of Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Investment and Dream Industrial.
Diversification Opportunities for Western Investment and Dream Industrial
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Dream is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Western Investment and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real and Western Investment 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 Western Investment are associated (or correlated) with Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of Western Investment i.e., Western Investment and Dream Industrial go up and down completely randomly.
Pair Corralation between Western Investment and Dream Industrial
Given the investment horizon of 90 days Western Investment is expected to generate 3.48 times more return on investment than Dream Industrial. However, Western Investment is 3.48 times more volatile than Dream Industrial Real. It trades about 0.02 of its potential returns per unit of risk. Dream Industrial Real is currently generating about 0.0 per unit of risk. If you would invest 48.00 in Western Investment on September 3, 2024 and sell it today you would lose (1.00) from holding Western Investment or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Investment vs. Dream Industrial Real
Performance |
| Timeline |
| Western Investment |
| Dream Industrial Real |
Western Investment and Dream Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Investment and Dream Industrial
The main advantage of trading using opposite Western Investment and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Investment position performs unexpectedly, Dream Industrial 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 Industrial will offset losses from the drop in Dream Industrial's long position.| Western Investment vs. Colliers International Group | Western Investment vs. Altus Group Limited | Western Investment vs. Harvest Global REIT | Western Investment vs. International Zeolite Corp |
| Dream Industrial vs. Granite Real Estate | Dream Industrial vs. NorthWest Healthcare Properties | Dream Industrial vs. Choice Properties Real | Dream Industrial vs. Canadian Apartment Properties |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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