Correlation Between InterRent Real and Bridgemarq Real

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

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

Diversification Opportunities for InterRent Real and Bridgemarq Real

0.75

Correlation Coefficient

InterRent Real  Bridgemarq Real

Poor diversification

The 3 months correlation between InterRent and Bridgemarq is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding InterRent Real Estate and Bridgemarq Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgemarq Real Estate and InterRent 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 InterRent Real Estate are associated (or correlated) with Bridgemarq Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgemarq Real Estate has no effect on the direction of InterRent Real i.e., InterRent Real and Bridgemarq Real go up and down completely randomly.

Pair Corralation between InterRent Real and Bridgemarq Real

Assuming the 90 days trading horizon InterRent Real Estate is expected to under-perform the Bridgemarq Real. But the stock apears to be less risky and, when comparing its historical volatility, InterRent Real Estate is 1.1 times less risky than Bridgemarq Real. The stock trades about -0.13 of its potential returns per unit of risk. The Bridgemarq Real Estate is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,476  in Bridgemarq Real Estate on December 2, 2024 and sell it today you would lose (116.00) from holding Bridgemarq Real Estate or give up 7.86% of portfolio value over 90 days.

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

InterRent Real Estate  vs.  Bridgemarq Real Estate

InterRent Real Estate

Risk-Adjusted Performance

Very Weak

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

Bridgemarq Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bridgemarq Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental 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 InterRent Real and Bridgemarq Real

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

The idea behind InterRent Real Estate and Bridgemarq 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.