Correlation Between Granite Real and Killam Apartment

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

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

Diversification Opportunities for Granite Real and Killam Apartment

0.88

Correlation Coefficient

Granite Real  Killam Apartment

Very poor diversification

The 3 months correlation between Granite and Killam is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and Killam Apartment Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killam Apartment Real and Granite 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 Granite Real Estate are associated (or correlated) with Killam Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killam Apartment Real has no effect on the direction of Granite Real i.e., Granite Real and Killam Apartment go up and down completely randomly.

Pair Corralation between Granite Real and Killam Apartment

Assuming the 90 days trading horizon Granite Real Estate is expected to generate 0.7 times more return on investment than Killam Apartment. However, Granite Real Estate is 1.43 times less risky than Killam Apartment. It trades about 0.26 of its potential returns per unit of risk. Killam Apartment Real is currently generating about 0.14 per unit of risk. If you would invest  6,236  in Granite Real Estate on April 24, 2025 and sell it today you would earn a total of  1,061  from holding Granite Real Estate or generate 17.01% return on investment over 90 days.

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

Granite Real Estate  vs.  Killam Apartment Real

Granite Real Estate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Real Estate are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Granite Real sustained solid returns over the last few months and may actually be approaching a breakup point.

Killam Apartment Real

Risk-Adjusted Performance

Good

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

Pair Trading with Granite Real and Killam Apartment

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

The idea behind Granite Real Estate and Killam Apartment 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.