Correlation Between CSHG Real and Performa Real

Can any of the company-specific risk be diversified away by investing in both CSHG Real and Performa 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 CSHG Real and Performa Real 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 Performa Real Estate, you can compare the effects of market volatilities on CSHG Real and Performa 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 CSHG Real with a short position of Performa Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSHG Real and Performa Real.

Diversification Opportunities for CSHG Real and Performa Real

0.31

Correlation Coefficient

CSHG Real  Performa Real

Weak diversification

The 3 months correlation between CSHG and Performa is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CSHG Real Estate and Performa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performa Real Estate 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 Performa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performa Real Estate has no effect on the direction of CSHG Real i.e., CSHG Real and Performa Real go up and down completely randomly.

Pair Corralation between CSHG Real and Performa Real

Assuming the 90 days trading horizon CSHG Real Estate is expected to generate 0.33 times more return on investment than Performa Real. However, CSHG Real Estate is 3.02 times less risky than Performa Real. It trades about -0.03 of its potential returns per unit of risk. Performa Real Estate is currently generating about -0.07 per unit of risk. If you would invest  10,352  in CSHG Real Estate on October 10, 2024 and sell it today you would lose (358.00) from holding CSHG Real Estate or give up 3.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.53%
Values	Daily Returns

CSHG Real Estate  vs.  Performa Real Estate

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.

Performa Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Performa Real Estate has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's primary indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with CSHG Real and Performa Real

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

The idea behind CSHG Real Estate and Performa 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.