Correlation Between Real Matters and DIRTT Environmental

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

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

Diversification Opportunities for Real Matters and DIRTT Environmental

-0.5

Correlation Coefficient

Real Matters  DIRTT Environmental

Very good diversification

The 3 months correlation between Real and DIRTT is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Real Matters and DIRTT Environmental Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIRTT Environmental and Real Matters 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 Real Matters 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 Real Matters i.e., Real Matters and DIRTT Environmental go up and down completely randomly.

Pair Corralation between Real Matters and DIRTT Environmental

Assuming the 90 days trading horizon Real Matters is expected to generate 0.69 times more return on investment than DIRTT Environmental. However, Real Matters is 1.44 times less risky than DIRTT Environmental. It trades about 0.19 of its potential returns per unit of risk. DIRTT Environmental Solutions is currently generating about -0.01 per unit of risk. If you would invest  561.00  in Real Matters on July 7, 2025 and sell it today you would earn a total of  191.00  from holding Real Matters or generate 34.05% return on investment over 90 days.

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

Real Matters  vs.  DIRTT Environmental Solutions

Real Matters

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Real Matters are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Real Matters displayed solid returns over the last few months and may actually be approaching a breakup point.

DIRTT Environmental

Risk-Adjusted Performance

Weakest

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 Real Matters and DIRTT Environmental

The main advantage of trading using opposite Real Matters and DIRTT Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Matters 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 Real Matters 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.