Correlation Between Artis Real and Crombie Real

Can any of the company-specific risk be diversified away by investing in both Artis Real and Crombie 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 Artis Real and Crombie Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artis Real Estate and Crombie Real Estate, you can compare the effects of market volatilities on Artis Real and Crombie 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 Artis Real with a short position of Crombie Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artis Real and Crombie Real.

Diversification Opportunities for Artis Real and Crombie Real

0.78

Correlation Coefficient

Artis Real  Crombie Real

Poor diversification

The 3 months correlation between Artis and Crombie is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Artis Real Estate and Crombie Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crombie Real Estate and Artis Real 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 Artis Real Estate are associated (or correlated) with Crombie Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crombie Real Estate has no effect on the direction of Artis Real i.e., Artis Real and Crombie Real go up and down completely randomly.

Pair Corralation between Artis Real and Crombie Real

Assuming the 90 days trading horizon Artis Real is expected to generate 3.61 times less return on investment than Crombie Real. But when comparing it to its historical volatility, Artis Real Estate is 1.06 times less risky than Crombie Real. It trades about 0.01 of its potential returns per unit of risk. Crombie Real Estate is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,422  in Crombie Real Estate on November 29, 2024 and sell it today you would earn a total of  15.00  from holding Crombie Real Estate or generate 1.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Artis Real Estate  vs.  Crombie Real Estate

Artis Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artis Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Artis Real is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Crombie Real Estate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crombie Real Estate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Crombie Real is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artis Real and Crombie Real

The main advantage of trading using opposite Artis Real and Crombie Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artis Real position performs unexpectedly, Crombie 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 Crombie Real will offset losses from the drop in Crombie Real's long position.

The idea behind Artis Real Estate and Crombie Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.