Correlation Between HR Real and Killam Apartment

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

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

Diversification Opportunities for HR Real and Killam Apartment

0.9

Correlation Coefficient

HR Real  Killam Apartment

Almost no diversification

The 3 months correlation between HR-UN and Killam is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding HR Real Estate and Killam Apartment Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killam Apartment Real and HR 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 HR Real Estate are associated (or correlated) with Killam Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killam Apartment Real has no effect on the direction of HR Real i.e., HR Real and Killam Apartment go up and down completely randomly.

Pair Corralation between HR Real and Killam Apartment

Assuming the 90 days trading horizon HR Real Estate is expected to under-perform the Killam Apartment. In addition to that, HR Real is 1.11 times more volatile than Killam Apartment Real. It trades about -0.01 of its total potential returns per unit of risk. Killam Apartment Real is currently generating about 0.04 per unit of volatility. If you would invest  1,489  in Killam Apartment Real on September 14, 2024 and sell it today you would earn a total of  285.00  from holding Killam Apartment Real or generate 19.14% return on investment over 90 days.

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

HR Real Estate  vs.  Killam Apartment Real

HR Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HR Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Killam Apartment Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Killam Apartment Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with HR Real and Killam Apartment

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

The idea behind HR Real Estate and Killam 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.