Correlation Between Allied Properties and True North

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

By analyzing existing cross correlation between Allied Properties Real and True North Commercial, you can compare the effects of market volatilities on Allied Properties and True North 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 Allied Properties with a short position of True North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Properties and True North.

Diversification Opportunities for Allied Properties and True North

0.59

Correlation Coefficient

Allied Properties  True North

Very weak diversification

The 3 months correlation between Allied and True is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Allied Properties Real and True North Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True North Commercial and Allied Properties 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 Allied Properties Real are associated (or correlated) with True North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True North Commercial has no effect on the direction of Allied Properties i.e., Allied Properties and True North go up and down completely randomly.

Pair Corralation between Allied Properties and True North

Assuming the 90 days trading horizon Allied Properties Real is expected to generate 1.09 times more return on investment than True North. However, Allied Properties is 1.09 times more volatile than True North Commercial. It trades about 0.2 of its potential returns per unit of risk. True North Commercial is currently generating about 0.02 per unit of risk. If you would invest  1,515  in Allied Properties Real on April 24, 2025 and sell it today you would earn a total of  278.00  from holding Allied Properties Real or generate 18.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Allied Properties Real  vs.  True North Commercial

Allied Properties Real

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allied Properties Real are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Allied Properties unveiled solid returns over the last few months and may actually be approaching a breakup point.

True North Commercial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in True North Commercial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, True North is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allied Properties and True North

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

The idea behind Allied Properties Real and True North Commercial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.