Correlation Between Crombie Real and Minto Apartment

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

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

Diversification Opportunities for Crombie Real and Minto Apartment

0.77

Correlation Coefficient

Crombie Real  Minto Apartment

Poor diversification

The 3 months correlation between Crombie and Minto is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Minto Apartment Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minto Apartment Real and Crombie Real 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 Crombie Real Estate are associated (or correlated) with Minto Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minto Apartment Real has no effect on the direction of Crombie Real i.e., Crombie Real and Minto Apartment go up and down completely randomly.

Pair Corralation between Crombie Real and Minto Apartment

Assuming the 90 days trading horizon Crombie Real Estate is expected to under-perform the Minto Apartment. But the stock apears to be less risky and, when comparing its historical volatility, Crombie Real Estate is 1.11 times less risky than Minto Apartment. The stock trades about -0.16 of its potential returns per unit of risk. The Minto Apartment Real is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,401  in Minto Apartment Real on September 4, 2024 and sell it today you would earn a total of  41.00  from holding Minto Apartment Real or generate 2.93% return on investment over 90 days.

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

Crombie Real Estate  vs.  Minto Apartment Real

Crombie Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crombie Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Crombie Real is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Minto Apartment Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minto Apartment Real has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Crombie Real and Minto Apartment

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

The idea behind Crombie Real Estate and Minto Apartment Real 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.