Correlation Between Medalist Diversified and Crombie Real

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

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

Diversification Opportunities for Medalist Diversified and Crombie Real

0.21

Correlation Coefficient

Medalist Diversified  Crombie Real

Modest diversification

The 3 months correlation between Medalist and Crombie is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Medalist Diversified Reit and Crombie Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crombie Real Estate and Medalist Diversified 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 Medalist Diversified Reit are associated (or correlated) with Crombie Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crombie Real Estate has no effect on the direction of Medalist Diversified i.e., Medalist Diversified and Crombie Real go up and down completely randomly.

Pair Corralation between Medalist Diversified and Crombie Real

Given the investment horizon of 90 days Medalist Diversified Reit is expected to under-perform the Crombie Real. In addition to that, Medalist Diversified is 2.4 times more volatile than Crombie Real Estate. It trades about -0.01 of its total potential returns per unit of risk. Crombie Real Estate is currently generating about 0.14 per unit of volatility. If you would invest  919.00  in Crombie Real Estate on December 30, 2024 and sell it today you would earn a total of  64.00  from holding Crombie Real Estate or generate 6.96% return on investment over 90 days.

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

Medalist Diversified Reit  vs.  Crombie Real Estate

Medalist Diversified Reit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Medalist Diversified Reit has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Medalist Diversified is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Crombie Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Crombie Real Estate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, Crombie Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Medalist Diversified and Crombie Real

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

The idea behind Medalist Diversified Reit and Crombie 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.