Correlation Between Crombie Real and Semtech

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

Diversification Opportunities for Crombie Real and Semtech

-0.75

Correlation Coefficient

Crombie Real  Semtech

Pay attention - limited upside

The 3 months correlation between Crombie and Semtech is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and Semtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semtech 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 Semtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semtech has no effect on the direction of Crombie Real i.e., Crombie Real and Semtech go up and down completely randomly.

Pair Corralation between Crombie Real and Semtech

Assuming the 90 days horizon Crombie Real Estate is expected to under-perform the Semtech. But the pink sheet apears to be less risky and, when comparing its historical volatility, Crombie Real Estate is 3.82 times less risky than Semtech. The pink sheet trades about -0.2 of its potential returns per unit of risk. The Semtech is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2,332  in Semtech on February 5, 2024 and sell it today you would earn a total of  1,569  from holding Semtech or generate 67.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

Crombie Real Estate  vs.  Semtech

Crombie Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crombie Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Crombie Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Semtech

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Semtech are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Semtech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crombie Real and Semtech

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

The idea behind Crombie Real Estate and Semtech 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 Anywhere module to track or share privately all of your investments from the convenience of any device.