Correlation Between Schwab REIT and Altus Group

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Can any of the company-specific risk be diversified away by investing in both Schwab REIT and Altus Group 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 Schwab REIT and Altus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwab REIT ETF and Altus Group Limited, you can compare the effects of market volatilities on Schwab REIT and Altus Group 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 Schwab REIT with a short position of Altus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwab REIT and Altus Group.

Diversification Opportunities for Schwab REIT and Altus Group

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Schwab and Altus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Schwab REIT ETF and Altus Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Group Limited and Schwab REIT 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 Schwab REIT ETF are associated (or correlated) with Altus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Group Limited has no effect on the direction of Schwab REIT i.e., Schwab REIT and Altus Group go up and down completely randomly.

Pair Corralation between Schwab REIT and Altus Group

Given the investment horizon of 90 days Schwab REIT is expected to generate 19.14 times less return on investment than Altus Group. But when comparing it to its historical volatility, Schwab REIT ETF is 1.22 times less risky than Altus Group. It trades about 0.01 of its potential returns per unit of risk. Altus Group Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  5,206  in Altus Group Limited on May 7, 2025 and sell it today you would earn a total of  599.00  from holding Altus Group Limited or generate 11.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.39%
ValuesDaily Returns

Schwab REIT ETF  vs.  Altus Group Limited

 Performance 
       Timeline  
Schwab REIT ETF 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Schwab REIT ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Schwab REIT is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
Altus Group Limited 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Altus Group Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Altus Group may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Schwab REIT and Altus Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Schwab REIT and Altus Group

The main advantage of trading using opposite Schwab REIT and Altus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwab REIT position performs unexpectedly, Altus Group 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 Altus Group will offset losses from the drop in Altus Group's long position.
The idea behind Schwab REIT ETF and Altus Group Limited 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.
Check out your portfolio center.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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