Correlation Between Dimand SA and BriQ Properties

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

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

Diversification Opportunities for Dimand SA and BriQ Properties

0.18

Correlation Coefficient

Dimand SA  BriQ Properties

Average diversification

The 3 months correlation between Dimand and BriQ is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dimand SA and BriQ Properties Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BriQ Properties Real and Dimand SA 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 Dimand SA are associated (or correlated) with BriQ Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BriQ Properties Real has no effect on the direction of Dimand SA i.e., Dimand SA and BriQ Properties go up and down completely randomly.

Pair Corralation between Dimand SA and BriQ Properties

Assuming the 90 days trading horizon Dimand SA is expected to generate 5.96 times less return on investment than BriQ Properties. But when comparing it to its historical volatility, Dimand SA is 1.02 times less risky than BriQ Properties. It trades about 0.03 of its potential returns per unit of risk. BriQ Properties Real is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  212.00  in BriQ Properties Real on December 1, 2024 and sell it today you would earn a total of  27.00  from holding BriQ Properties Real or generate 12.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Dimand SA  vs.  BriQ Properties Real

Dimand SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dimand SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Dimand SA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

BriQ Properties Real

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BriQ Properties Real are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BriQ Properties unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dimand SA and BriQ Properties

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

The idea behind Dimand SA and BriQ 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.