Correlation Between CT Real and Smart REIT

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

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

Diversification Opportunities for CT Real and Smart REIT

0.61

Correlation Coefficient

CT Real  Smart REIT

Poor diversification

The 3 months correlation between CTRRF and Smart is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CT Real Estate and Smart REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart REIT and CT 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 CT Real Estate are associated (or correlated) with Smart REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart REIT has no effect on the direction of CT Real i.e., CT Real and Smart REIT go up and down completely randomly.

Pair Corralation between CT Real and Smart REIT

If you would invest  1,037  in CT Real Estate on October 21, 2024 and sell it today you would earn a total of  0.00  from holding CT Real Estate or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

CT Real Estate  vs.  Smart REIT

CT Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic 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.

Smart REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CT Real and Smart REIT

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

The idea behind CT Real Estate and Smart REIT 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.