Correlation Between CSHG Real and Real Estate

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

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

Diversification Opportunities for CSHG Real and Real Estate

0.67

Correlation Coefficient

CSHG Real  Real Estate

Poor diversification

The 3 months correlation between CSHG and Real is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CSHG Real Estate and Real Estate Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Investment and CSHG 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 CSHG Real Estate are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Investment has no effect on the direction of CSHG Real i.e., CSHG Real and Real Estate go up and down completely randomly.

Pair Corralation between CSHG Real and Real Estate

Assuming the 90 days trading horizon CSHG Real is expected to generate 266.25 times less return on investment than Real Estate. But when comparing it to its historical volatility, CSHG Real Estate is 45.02 times less risky than Real Estate. It trades about 0.01 of its potential returns per unit of risk. Real Estate Investment is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  745.00  in Real Estate Investment on October 9, 2024 and sell it today you would earn a total of  54.00  from holding Real Estate Investment or generate 7.25% return on investment over 90 days.

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

CSHG Real Estate  vs.  Real Estate Investment

CSHG Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSHG Real Estate has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, CSHG Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Real Estate Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Estate Investment has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with CSHG Real and Real Estate

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

The idea behind CSHG Real Estate and Real Estate Investment 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.