Correlation Between HR Real and Boardwalk Real

Can any of the company-specific risk be diversified away by investing in both HR Real and Boardwalk Real 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 Boardwalk Real 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 Boardwalk Real Estate, you can compare the effects of market volatilities on HR Real and Boardwalk Real 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 Boardwalk Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of HR Real and Boardwalk Real.

Diversification Opportunities for HR Real and Boardwalk Real

-0.47

Correlation Coefficient

HR Real  Boardwalk Real

Very good diversification

The 3 months correlation between HR-UN and Boardwalk is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding HR Real Estate and Boardwalk Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boardwalk Real Estate 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 Boardwalk Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boardwalk Real Estate has no effect on the direction of HR Real i.e., HR Real and Boardwalk Real go up and down completely randomly.

Pair Corralation between HR Real and Boardwalk Real

Assuming the 90 days trading horizon HR Real Estate is expected to generate 1.1 times more return on investment than Boardwalk Real. However, HR Real is 1.1 times more volatile than Boardwalk Real Estate. It trades about 0.01 of its potential returns per unit of risk. Boardwalk Real Estate is currently generating about -0.17 per unit of risk. If you would invest  913.00  in HR Real Estate on March 12, 2024 and sell it today you would earn a total of  2.00  from holding HR Real Estate or generate 0.22% return on investment over 90 days.

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

HR Real Estate  vs.  Boardwalk Real Estate

HR Real Estate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HR Real Estate are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, HR Real is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Boardwalk Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boardwalk Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with HR Real and Boardwalk Real

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

The idea behind HR Real Estate and Boardwalk Real Estate 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.