Correlation Between Peace Living and Property Perfect

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

By analyzing existing cross correlation between Peace Living PCL and Property Perfect Public, you can compare the effects of market volatilities on Peace Living and Property Perfect 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 Peace Living with a short position of Property Perfect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peace Living and Property Perfect.

Diversification Opportunities for Peace Living and Property Perfect

0.32

Correlation Coefficient

Peace Living  Property Perfect

Weak diversification

The 3 months correlation between Peace and Property is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Peace Living PCL and Property Perfect Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Property Perfect Public and Peace Living 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 Peace Living PCL are associated (or correlated) with Property Perfect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Property Perfect Public has no effect on the direction of Peace Living i.e., Peace Living and Property Perfect go up and down completely randomly.

Pair Corralation between Peace Living and Property Perfect

Assuming the 90 days trading horizon Peace Living PCL is expected to generate 0.27 times more return on investment than Property Perfect. However, Peace Living PCL is 3.71 times less risky than Property Perfect. It trades about -0.09 of its potential returns per unit of risk. Property Perfect Public is currently generating about -0.06 per unit of risk. If you would invest  244.00  in Peace Living PCL on December 30, 2024 and sell it today you would lose (16.00) from holding Peace Living PCL or give up 6.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

Peace Living PCL  vs.  Property Perfect Public

Peace Living PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peace Living PCL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Property Perfect Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Property Perfect Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Peace Living and Property Perfect

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

The idea behind Peace Living PCL and Property Perfect Public 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.