Correlation Between Sun Residential and Boardwalk Real

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

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

Diversification Opportunities for Sun Residential and Boardwalk Real

-0.47

Correlation Coefficient

Sun Residential  Boardwalk Real

Very good diversification

The 3 months correlation between Sun and Boardwalk is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sun Residential Real 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 Sun Residential 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 Sun Residential Real 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 Sun Residential i.e., Sun Residential and Boardwalk Real go up and down completely randomly.

Pair Corralation between Sun Residential and Boardwalk Real

Assuming the 90 days trading horizon Sun Residential Real is expected to under-perform the Boardwalk Real. In addition to that, Sun Residential is 3.84 times more volatile than Boardwalk Real Estate. It trades about -0.07 of its total potential returns per unit of risk. Boardwalk Real Estate is currently generating about -0.09 per unit of volatility. If you would invest  7,629  in Boardwalk Real Estate on January 25, 2024 and sell it today you would lose (226.00) from holding Boardwalk Real Estate or give up 2.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Sun Residential Real  vs.  Boardwalk Real Estate

Sun Residential Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Residential Real has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Boardwalk Real Estate

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Boardwalk Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Boardwalk Real may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Sun Residential and Boardwalk Real

The main advantage of trading using opposite Sun Residential and Boardwalk Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Residential 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 Sun Residential Real 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.