Correlation Between CT Real and Choice Properties

Can any of the company-specific risk be diversified away by investing in both CT Real and Choice Properties 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 Choice Properties 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 Choice Properties Real, you can compare the effects of market volatilities on CT Real and Choice Properties 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 Choice Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of CT Real and Choice Properties.

Diversification Opportunities for CT Real and Choice Properties

0.65

Correlation Coefficient

CT Real  Choice Properties

Poor diversification

The 3 months correlation between CTRRF and Choice is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CT Real Estate and Choice Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Properties Real 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 Choice Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Properties Real has no effect on the direction of CT Real i.e., CT Real and Choice Properties go up and down completely randomly.

Pair Corralation between CT Real and Choice Properties

Assuming the 90 days horizon CT Real Estate is expected to under-perform the Choice Properties. In addition to that, CT Real is 2.7 times more volatile than Choice Properties Real. It trades about -0.06 of its total potential returns per unit of risk. Choice Properties Real is currently generating about -0.14 per unit of volatility. If you would invest  1,071  in Choice Properties Real on September 14, 2024 and sell it today you would lose (103.00) from holding Choice Properties Real or give up 9.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	93.1%
Values	Daily Returns

CT Real Estate  vs.  Choice Properties Real

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Choice Properties Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Choice Properties Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent 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 Choice Properties

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

The idea behind CT Real Estate and Choice Properties Real 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.