Correlation Between Dividend Growth and Crombie Real

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

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

Diversification Opportunities for Dividend Growth and Crombie Real

0.13

Correlation Coefficient

Dividend Growth  Crombie Real

Average diversification

The 3 months correlation between Dividend and Crombie is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Dividend Growth Split 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 Dividend Growth 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 Dividend Growth Split 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 Dividend Growth i.e., Dividend Growth and Crombie Real go up and down completely randomly.

Pair Corralation between Dividend Growth and Crombie Real

Assuming the 90 days trading horizon Dividend Growth Split is expected to under-perform the Crombie Real. In addition to that, Dividend Growth is 1.13 times more volatile than Crombie Real Estate. It trades about -0.06 of its total potential returns per unit of risk. Crombie Real Estate is currently generating about 0.02 per unit of volatility. If you would invest  1,394  in Crombie Real Estate on December 2, 2024 and sell it today you would earn a total of  18.00  from holding Crombie Real Estate or generate 1.29% return on investment over 90 days.

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

Dividend Growth Split  vs.  Crombie Real Estate

Dividend Growth Split

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dividend Growth Split has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Dividend Growth is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the 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 Dividend Growth and Crombie Real

The main advantage of trading using opposite Dividend Growth and Crombie Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dividend Growth 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 Dividend Growth Split 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.