Correlation Between Dividend and Chartwell Retirement

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

By analyzing existing cross correlation between Dividend 15 Split and Chartwell Retirement Residences, you can compare the effects of market volatilities on Dividend and Chartwell Retirement 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 Dividend with a short position of Chartwell Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend and Chartwell Retirement.

Diversification Opportunities for Dividend and Chartwell Retirement

0.7

Correlation Coefficient

Dividend  Chartwell Retirement

Poor diversification

The 3 months correlation between Dividend and Chartwell is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split and Chartwell Retirement Residence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Retirement and Dividend 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 Dividend 15 Split are associated (or correlated) with Chartwell Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Retirement has no effect on the direction of Dividend i.e., Dividend and Chartwell Retirement go up and down completely randomly.

Pair Corralation between Dividend and Chartwell Retirement

Assuming the 90 days horizon Dividend 15 Split is expected to generate 0.83 times more return on investment than Chartwell Retirement. However, Dividend 15 Split is 1.21 times less risky than Chartwell Retirement. It trades about 0.32 of its potential returns per unit of risk. Chartwell Retirement Residences is currently generating about 0.05 per unit of risk. If you would invest  537.00  in Dividend 15 Split on September 12, 2024 and sell it today you would earn a total of  106.00  from holding Dividend 15 Split or generate 19.74% return on investment over 90 days.

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

Dividend 15 Split  vs.  Chartwell Retirement Residence

Dividend 15 Split

Risk-Adjusted Performance

24 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dividend displayed solid returns over the last few months and may actually be approaching a breakup point.

Chartwell Retirement

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Retirement Residences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Chartwell Retirement is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dividend and Chartwell Retirement

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

The idea behind Dividend 15 Split and Chartwell Retirement Residences 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.