Correlation Between Arbor Realty and Arbor Realty
Can any of the company-specific risk be diversified away by investing in both Arbor Realty and Arbor Realty 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 Arbor Realty and Arbor Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Realty Trust and Arbor Realty Trust, you can compare the effects of market volatilities on Arbor Realty and Arbor Realty 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 Arbor Realty with a short position of Arbor Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and Arbor Realty.
Diversification Opportunities for Arbor Realty and Arbor Realty
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arbor and Arbor is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and Arbor Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Realty Trust and Arbor Realty 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 Arbor Realty Trust are associated (or correlated) with Arbor Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Realty Trust has no effect on the direction of Arbor Realty i.e., Arbor Realty and Arbor Realty go up and down completely randomly.
Pair Corralation between Arbor Realty and Arbor Realty
Assuming the 90 days trading horizon Arbor Realty Trust is expected to under-perform the Arbor Realty. But the preferred stock apears to be less risky and, when comparing its historical volatility, Arbor Realty Trust is 1.57 times less risky than Arbor Realty. The preferred stock trades about -0.61 of its potential returns per unit of risk. The Arbor Realty Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,036 in Arbor Realty Trust on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Arbor Realty Trust or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Realty Trust vs. Arbor Realty Trust
Performance |
| Timeline |
| Arbor Realty Trust |
| Arbor Realty Trust |
Arbor Realty and Arbor Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Realty and Arbor Realty
The main advantage of trading using opposite Arbor Realty and Arbor Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty position performs unexpectedly, Arbor Realty 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 Arbor Realty will offset losses from the drop in Arbor Realty's long position.| Arbor Realty vs. Rithm Capital Corp | Arbor Realty vs. PennyMac Mortgage Investment | Arbor Realty vs. AGNC Investment Corp |
| Arbor Realty vs. New York Mortgage | Arbor Realty vs. New York Mortgage | Arbor Realty vs. Two Harbors Investment | Arbor Realty vs. Two Harbors 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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