Correlation Between CS Real and Realstone Swiss

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

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

Diversification Opportunities for CS Real and Realstone Swiss

0.89

Correlation Coefficient

CS Real  Realstone Swiss

Very poor diversification

The 3 months correlation between HOSP and Realstone is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding CS Real Estate and Realstone Swiss Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realstone Swiss Property and CS 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 CS Real Estate are associated (or correlated) with Realstone Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realstone Swiss Property has no effect on the direction of CS Real i.e., CS Real and Realstone Swiss go up and down completely randomly.

Pair Corralation between CS Real and Realstone Swiss

Assuming the 90 days trading horizon CS Real is expected to generate 1.18 times less return on investment than Realstone Swiss. In addition to that, CS Real is 1.34 times more volatile than Realstone Swiss Property. It trades about 0.09 of its total potential returns per unit of risk. Realstone Swiss Property is currently generating about 0.14 per unit of volatility. If you would invest  12,250  in Realstone Swiss Property on September 26, 2024 and sell it today you would earn a total of  2,450  from holding Realstone Swiss Property or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	26.91%
Values	Daily Returns

CS Real Estate  vs.  Realstone Swiss Property

CS Real Estate

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CS Real Estate are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, CS Real showed solid returns over the last few months and may actually be approaching a breakup point.

Realstone Swiss Property

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Realstone Swiss Property are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Realstone Swiss may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CS Real and Realstone Swiss

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

The idea behind CS Real Estate and Realstone Swiss Property 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.