Correlation Between Primaris Retail and DIRTT Environmental

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

By analyzing existing cross correlation between Primaris Retail RE and DIRTT Environmental Solutions, you can compare the effects of market volatilities on Primaris Retail and DIRTT Environmental 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 Primaris Retail with a short position of DIRTT Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and DIRTT Environmental.

Diversification Opportunities for Primaris Retail and DIRTT Environmental

-0.32

Correlation Coefficient

Primaris Retail  DIRTT Environmental

Very good diversification

The 3 months correlation between Primaris and DIRTT is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and DIRTT Environmental Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIRTT Environmental and Primaris Retail 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 Primaris Retail RE are associated (or correlated) with DIRTT Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIRTT Environmental has no effect on the direction of Primaris Retail i.e., Primaris Retail and DIRTT Environmental go up and down completely randomly.

Pair Corralation between Primaris Retail and DIRTT Environmental

Assuming the 90 days trading horizon Primaris Retail is expected to generate 4.21 times less return on investment than DIRTT Environmental. But when comparing it to its historical volatility, Primaris Retail RE is 3.67 times less risky than DIRTT Environmental. It trades about 0.04 of its potential returns per unit of risk. DIRTT Environmental Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  48.00  in DIRTT Environmental Solutions on May 2, 2025 and sell it today you would earn a total of  42.00  from holding DIRTT Environmental Solutions or generate 87.5% return on investment over 90 days.

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

Primaris Retail RE  vs.  DIRTT Environmental Solutions

Primaris Retail RE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Primaris Retail RE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Primaris Retail is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

DIRTT Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days DIRTT Environmental Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, DIRTT Environmental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Primaris Retail and DIRTT Environmental

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

The idea behind Primaris Retail RE and DIRTT Environmental Solutions 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.