Correlation Between Crombie Real and Buhler Industries

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

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

Diversification Opportunities for Crombie Real and Buhler Industries

0.0

Correlation Coefficient

Crombie Real  Buhler Industries

Pay attention - limited upside

The 3 months correlation between Crombie and Buhler is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Buhler Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buhler Industries and Crombie 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 Crombie Real Estate are associated (or correlated) with Buhler Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buhler Industries has no effect on the direction of Crombie Real i.e., Crombie Real and Buhler Industries go up and down completely randomly.

Pair Corralation between Crombie Real and Buhler Industries

Assuming the 90 days horizon Crombie Real is expected to generate 4.31 times less return on investment than Buhler Industries. In addition to that, Crombie Real is 1.71 times more volatile than Buhler Industries. It trades about 0.01 of its total potential returns per unit of risk. Buhler Industries is currently generating about 0.05 per unit of volatility. If you would invest  150.00  in Buhler Industries on October 4, 2024 and sell it today you would earn a total of  38.00  from holding Buhler Industries or generate 25.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	51.73%
Values	Daily Returns

Crombie Real Estate  vs.  Buhler Industries

Crombie Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crombie Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Buhler Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Buhler Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Buhler Industries is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Crombie Real and Buhler Industries

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

The idea behind Crombie Real Estate and Buhler Industries 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.