Correlation Between BSR Real and Storage Vault

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

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

Diversification Opportunities for BSR Real and Storage Vault

0.64

Correlation Coefficient

BSR Real  Storage Vault

Poor diversification

The 3 months correlation between BSR and Storage is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BSR Real Estate and Storage Vault Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storage Vault Canada and BSR 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 BSR Real Estate are associated (or correlated) with Storage Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storage Vault Canada has no effect on the direction of BSR Real i.e., BSR Real and Storage Vault go up and down completely randomly.

Pair Corralation between BSR Real and Storage Vault

Assuming the 90 days trading horizon BSR Real Estate is expected to generate 1.05 times more return on investment than Storage Vault. However, BSR Real is 1.05 times more volatile than Storage Vault Canada. It trades about 0.08 of its potential returns per unit of risk. Storage Vault Canada is currently generating about 0.02 per unit of risk. If you would invest  1,758  in BSR Real Estate on December 30, 2024 and sell it today you would earn a total of  150.00  from holding BSR Real Estate or generate 8.53% return on investment over 90 days.

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

BSR Real Estate  vs.  Storage Vault Canada

BSR Real Estate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BSR Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, BSR Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Storage Vault Canada

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Storage Vault Canada are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Storage Vault is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BSR Real and Storage Vault

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

The idea behind BSR Real Estate and Storage Vault Canada 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.