Correlation Between Crombie Real and Boardwalk Real

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

Diversification Opportunities for Crombie Real and Boardwalk Real

0.78

Correlation Coefficient

Crombie Real  Boardwalk Real

Poor diversification

The 3 months correlation between Crombie and Boardwalk is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Crombie 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 Crombie 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 Crombie 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 Crombie Real i.e., Crombie Real and Boardwalk Real go up and down completely randomly.

Pair Corralation between Crombie Real and Boardwalk Real

Assuming the 90 days trading horizon Crombie Real is expected to generate 3.85 times less return on investment than Boardwalk Real. But when comparing it to its historical volatility, Crombie Real Estate is 1.5 times less risky than Boardwalk Real. It trades about 0.07 of its potential returns per unit of risk. Boardwalk Real Estate is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,168  in Boardwalk Real Estate on April 21, 2025 and sell it today you would earn a total of  1,024  from holding Boardwalk Real Estate or generate 16.6% return on investment over 90 days.

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

Crombie Real Estate  vs.  Boardwalk Real Estate

Crombie Real Estate

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crombie Real Estate are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Crombie Real is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Boardwalk Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Boardwalk Real Estate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Boardwalk Real sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crombie Real and Boardwalk Real

The main advantage of trading using opposite Crombie Real and Boardwalk Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crombie 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 Crombie 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.