Correlation Between Pender Real and Versus Capital

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

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

Diversification Opportunities for Pender Real and Versus Capital

-0.29

Correlation Coefficient

Pender Real  Versus Capital

Very good diversification

The 3 months correlation between Pender and Versus is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate and Versus Capital Multi Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Versus Capital Multi and Pender 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 Pender Real Estate are associated (or correlated) with Versus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Versus Capital Multi has no effect on the direction of Pender Real i.e., Pender Real and Versus Capital go up and down completely randomly.

Pair Corralation between Pender Real and Versus Capital

Assuming the 90 days horizon Pender Real Estate is expected to generate 0.3 times more return on investment than Versus Capital. However, Pender Real Estate is 3.35 times less risky than Versus Capital. It trades about 0.63 of its potential returns per unit of risk. Versus Capital Multi Manager is currently generating about 0.07 per unit of risk. If you would invest  991.00  in Pender Real Estate on August 30, 2024 and sell it today you would earn a total of  18.00  from holding Pender Real Estate or generate 1.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Pender Real Estate  vs.  Versus Capital Multi Manager

Pender Real Estate

Risk-Adjusted Performance

49 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Pender Real Estate are ranked lower than 49 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pender Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Versus Capital Multi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Versus Capital Multi Manager are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Versus Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pender Real and Versus Capital

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

The idea behind Pender Real Estate and Versus Capital Multi Manager 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.