Correlation Between American Assets and Crown Castle
Can any of the company-specific risk be diversified away by investing in both American Assets and Crown Castle 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 American Assets and Crown Castle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Assets Trust and Crown Castle, you can compare the effects of market volatilities on American Assets and Crown Castle 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 American Assets with a short position of Crown Castle. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Assets and Crown Castle.
Diversification Opportunities for American Assets and Crown Castle
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Crown is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding American Assets Trust and Crown Castle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Castle and American Assets 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 American Assets Trust are associated (or correlated) with Crown Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Castle has no effect on the direction of American Assets i.e., American Assets and Crown Castle go up and down completely randomly.
Pair Corralation between American Assets and Crown Castle
Considering the 90-day investment horizon American Assets Trust is expected to generate 1.12 times more return on investment than Crown Castle. However, American Assets is 1.12 times more volatile than Crown Castle. It trades about 0.17 of its potential returns per unit of risk. Crown Castle is currently generating about 0.06 per unit of risk. If you would invest 2,033 in American Assets Trust on August 24, 2024 and sell it today you would earn a total of 751.00 from holding American Assets Trust or generate 36.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Assets Trust vs. Crown Castle
Performance |
| Timeline |
| American Assets Trust |
| Crown Castle |
American Assets and Crown Castle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Assets and Crown Castle
The main advantage of trading using opposite American Assets and Crown Castle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Assets position performs unexpectedly, Crown Castle 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 Crown Castle will offset losses from the drop in Crown Castle's long position.| American Assets vs. Essential Properties Realty | American Assets vs. Armada Hflr Pr | American Assets vs. CTO Realty Growth | American Assets vs. Brightspire Capital |
| Crown Castle vs. Digital Realty Trust | Crown Castle vs. Equinix | Crown Castle vs. SBA Communications Corp | Crown Castle vs. Iron Mountain Incorporated |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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