Correlation Between American Assets and Generation Income
Can any of the company-specific risk be diversified away by investing in both American Assets and Generation Income 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 Generation Income 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 Generation Income Properties, you can compare the effects of market volatilities on American Assets and Generation Income 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 Generation Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Assets and Generation Income.
Diversification Opportunities for American Assets and Generation Income
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Generation is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding American Assets Trust and Generation Income Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Income 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 Generation Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Income has no effect on the direction of American Assets i.e., American Assets and Generation Income go up and down completely randomly.
Pair Corralation between American Assets and Generation Income
Considering the 90-day investment horizon American Assets is expected to generate 30.32 times less return on investment than Generation Income. But when comparing it to its historical volatility, American Assets Trust is 17.72 times less risky than Generation Income. It trades about 0.11 of its potential returns per unit of risk. Generation Income Properties is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Generation Income Properties on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Generation Income Properties or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 42.86% |
| Values | Daily Returns |
American Assets Trust vs. Generation Income Properties
Performance |
| Timeline |
| American Assets Trust |
| Generation Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
American Assets and Generation Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Assets and Generation Income
The main advantage of trading using opposite American Assets and Generation Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Assets position performs unexpectedly, Generation Income 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 Generation Income will offset losses from the drop in Generation Income'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 |
| Generation Income vs. Investcorp Credit Management | Generation Income vs. Medalist Diversified Reit | Generation Income vs. Aquagold International | Generation Income vs. Morningstar Unconstrained Allocation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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