Correlation Between Northview Residential and Telus Corp

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

By analyzing existing cross correlation between Northview Residential REIT and Telus Corp, you can compare the effects of market volatilities on Northview Residential and Telus Corp 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 Northview Residential with a short position of Telus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northview Residential and Telus Corp.

Diversification Opportunities for Northview Residential and Telus Corp

0.38

Correlation Coefficient

Northview Residential  Telus Corp

Weak diversification

The 3 months correlation between Northview and Telus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Northview Residential REIT and Telus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telus Corp and Northview Residential 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 Northview Residential REIT are associated (or correlated) with Telus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telus Corp has no effect on the direction of Northview Residential i.e., Northview Residential and Telus Corp go up and down completely randomly.

Pair Corralation between Northview Residential and Telus Corp

Assuming the 90 days trading horizon Northview Residential REIT is expected to under-perform the Telus Corp. In addition to that, Northview Residential is 2.1 times more volatile than Telus Corp. It trades about -0.01 of its total potential returns per unit of risk. Telus Corp is currently generating about -0.02 per unit of volatility. If you would invest  2,302  in Telus Corp on October 9, 2024 and sell it today you would lose (303.00) from holding Telus Corp or give up 13.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.39%
Values	Daily Returns

Northview Residential REIT  vs.  Telus Corp

Northview Residential

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northview Residential REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Telus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Northview Residential and Telus Corp

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

The idea behind Northview Residential REIT and Telus Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.