Correlation Between Choice Properties and Canadian Net

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

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

Diversification Opportunities for Choice Properties and Canadian Net

0.6

Correlation Coefficient

Choice Properties  Canadian Net

Poor diversification

The 3 months correlation between Choice and Canadian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Choice Properties Real and Canadian Net Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Net Real and Choice 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 Choice Properties Real are associated (or correlated) with Canadian Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Net Real has no effect on the direction of Choice Properties i.e., Choice Properties and Canadian Net go up and down completely randomly.

Pair Corralation between Choice Properties and Canadian Net

Assuming the 90 days trading horizon Choice Properties is expected to generate 1.07 times less return on investment than Canadian Net. But when comparing it to its historical volatility, Choice Properties Real is 1.35 times less risky than Canadian Net. It trades about 0.06 of its potential returns per unit of risk. Canadian Net Real is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  545.00  in Canadian Net Real on April 22, 2025 and sell it today you would earn a total of  5.00  from holding Canadian Net Real or generate 0.92% return on investment over 90 days.

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

Choice Properties Real  vs.  Canadian Net Real

Choice Properties Real

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Choice Properties Real are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Choice Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Canadian Net Real

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Net Real are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Canadian Net may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Choice Properties and Canadian Net

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

The idea behind Choice Properties Real and Canadian Net 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..