Correlation Between CT Real and RioCan Real

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

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

Diversification Opportunities for CT Real and RioCan Real

0.76

Correlation Coefficient

CT Real  RioCan Real

Poor diversification

The 3 months correlation between CRT-UN and RioCan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CT Real Estate and RioCan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RioCan Real Estate and CT 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 CT Real Estate are associated (or correlated) with RioCan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RioCan Real Estate has no effect on the direction of CT Real i.e., CT Real and RioCan Real go up and down completely randomly.

Pair Corralation between CT Real and RioCan Real

Assuming the 90 days trading horizon CT Real Estate is expected to generate 0.91 times more return on investment than RioCan Real. However, CT Real Estate is 1.1 times less risky than RioCan Real. It trades about 0.17 of its potential returns per unit of risk. RioCan Real Estate is currently generating about 0.15 per unit of risk. If you would invest  1,451  in CT Real Estate on April 24, 2025 and sell it today you would earn a total of  122.00  from holding CT Real Estate or generate 8.41% return on investment over 90 days.

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

CT Real Estate  vs.  RioCan Real Estate

CT Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CT Real Estate are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CT Real may actually be approaching a critical reversion point that can send shares even higher in August 2025.

RioCan Real Estate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RioCan Real Estate are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, RioCan Real may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CT Real and RioCan Real

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

The idea behind CT Real Estate and RioCan 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.