Correlation Between IA Clarington and Real Estate

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

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

Diversification Opportunities for IA Clarington and Real Estate

0.29

Correlation Coefficient

IA Clarington  Real Estate

Modest diversification

The 3 months correlation between IGAF and Real is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding IA Clarington Loomis and Real Estate E Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate E and IA Clarington 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 IA Clarington Loomis 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 E has no effect on the direction of IA Clarington i.e., IA Clarington and Real Estate go up and down completely randomly.

Pair Corralation between IA Clarington and Real Estate

Assuming the 90 days trading horizon IA Clarington Loomis is expected to generate 0.77 times more return on investment than Real Estate. However, IA Clarington Loomis is 1.3 times less risky than Real Estate. It trades about 0.05 of its potential returns per unit of risk. Real Estate E Commerce is currently generating about 0.01 per unit of risk. If you would invest  1,554  in IA Clarington Loomis on October 20, 2024 and sell it today you would earn a total of  10.00  from holding IA Clarington Loomis or generate 0.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

IA Clarington Loomis  vs.  Real Estate E Commerce

IA Clarington Loomis

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IA Clarington Loomis are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IA Clarington is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Real Estate E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Estate E Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with IA Clarington and Real Estate

The main advantage of trading using opposite IA Clarington and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Clarington 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 IA Clarington Loomis and Real Estate E Commerce 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.