Correlation Between Property Perfect and Peace Living

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

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

Diversification Opportunities for Property Perfect and Peace Living

0.32

Correlation Coefficient

Property Perfect  Peace Living

Weak diversification

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

Pair Corralation between Property Perfect and Peace Living

Assuming the 90 days horizon Property Perfect Public is expected to under-perform the Peace Living. In addition to that, Property Perfect is 3.71 times more volatile than Peace Living PCL. It trades about -0.06 of its total potential returns per unit of risk. Peace Living PCL is currently generating about -0.09 per unit of volatility. 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

Property Perfect Public  vs.  Peace Living PCL

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.

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.

Pair Trading with Property Perfect and Peace Living

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

The idea behind Property Perfect Public and Peace Living PCL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.