Correlation Between Choice Properties and Riocan REIT
Can any of the company-specific risk be diversified away by investing in both Choice Properties and Riocan REIT 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 Choice Properties and Riocan REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Properties Real and Riocan REIT, you can compare the effects of market volatilities on Choice Properties and Riocan REIT 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 Choice Properties with a short position of Riocan REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Properties and Riocan REIT.
Diversification Opportunities for Choice Properties and Riocan REIT
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Choice and Riocan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Choice Properties Real and Riocan REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riocan REIT and Choice Properties 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 Choice Properties Real are associated (or correlated) with Riocan REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riocan REIT has no effect on the direction of Choice Properties i.e., Choice Properties and Riocan REIT go up and down completely randomly.
Pair Corralation between Choice Properties and Riocan REIT
Assuming the 90 days horizon Choice Properties Real is expected to generate 4.64 times more return on investment than Riocan REIT. However, Choice Properties is 4.64 times more volatile than Riocan REIT. It trades about 0.01 of its potential returns per unit of risk. Riocan REIT is currently generating about 0.01 per unit of risk. If you would invest 992.00 in Choice Properties Real on December 3, 2024 and sell it today you would lose (50.00) from holding Choice Properties Real or give up 5.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 77.05% |
Values | Daily Returns |
Choice Properties Real vs. Riocan REIT
Performance |
Timeline |
Choice Properties Real |
Riocan REIT |
Choice Properties and Riocan REIT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Choice Properties and Riocan REIT
The main advantage of trading using opposite Choice Properties and Riocan REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Properties position performs unexpectedly, Riocan REIT 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 Riocan REIT will offset losses from the drop in Riocan REIT's long position.Choice Properties vs. Smart REIT | Choice Properties vs. Slate Grocery REIT | Choice Properties vs. Simon Property Group | Choice Properties vs. Firm Capital Property |
Riocan REIT vs. Choice Properties Real | Riocan REIT vs. Firm Capital Property | Riocan REIT vs. Slate Grocery REIT | Riocan REIT vs. Smart REIT |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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