Correlation Between Crombie Real and Canadian Apartment

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

Diversification Opportunities for Crombie Real and Canadian Apartment

0.62

Correlation Coefficient

Crombie Real  Canadian Apartment

Poor diversification

The 3 months correlation between Crombie and Canadian is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Canadian Apartment Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Apartment 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 Canadian Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Apartment has no effect on the direction of Crombie Real i.e., Crombie Real and Canadian Apartment go up and down completely randomly.

Pair Corralation between Crombie Real and Canadian Apartment

Assuming the 90 days trading horizon Crombie Real is expected to generate 3.07 times less return on investment than Canadian Apartment. But when comparing it to its historical volatility, Crombie Real Estate is 1.42 times less risky than Canadian Apartment. It trades about 0.07 of its potential returns per unit of risk. Canadian Apartment Properties is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4,029  in Canadian Apartment Properties on April 23, 2025 and sell it today you would earn a total of  505.00  from holding Canadian Apartment Properties or generate 12.53% 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.  Canadian Apartment Properties

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.

Canadian Apartment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Apartment Properties are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Canadian Apartment may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Crombie Real and Canadian Apartment

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

The idea behind Crombie Real Estate and Canadian Apartment Properties 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.