Correlation Between Arbor Realty and ACRES Commercial
Can any of the company-specific risk be diversified away by investing in both Arbor Realty and ACRES Commercial 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 ACRES Commercial 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 ACRES Commercial Realty, you can compare the effects of market volatilities on Arbor Realty and ACRES Commercial 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 ACRES Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and ACRES Commercial.
Diversification Opportunities for Arbor Realty and ACRES Commercial
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arbor and ACRES is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and ACRES Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACRES Commercial Realty 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 ACRES Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACRES Commercial Realty has no effect on the direction of Arbor Realty i.e., Arbor Realty and ACRES Commercial go up and down completely randomly.
Pair Corralation between Arbor Realty and ACRES Commercial
Assuming the 90 days trading horizon Arbor Realty is expected to generate 1.71 times less return on investment than ACRES Commercial. In addition to that, Arbor Realty is 2.98 times more volatile than ACRES Commercial Realty. It trades about 0.03 of its total potential returns per unit of risk. ACRES Commercial Realty is currently generating about 0.13 per unit of volatility. If you would invest 2,454 in ACRES Commercial Realty on October 20, 2024 and sell it today you would earn a total of 23.00 from holding ACRES Commercial Realty or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Realty Trust vs. ACRES Commercial Realty
Performance |
| Timeline |
| Arbor Realty Trust |
| ACRES Commercial Realty |
Arbor Realty and ACRES Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Realty and ACRES Commercial
The main advantage of trading using opposite Arbor Realty and ACRES Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty position performs unexpectedly, ACRES Commercial 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 ACRES Commercial will offset losses from the drop in ACRES Commercial's long position.| Arbor Realty vs. Arbor Realty Trust | Arbor Realty vs. Arbor Realty Trust | Arbor Realty vs. ACRES Commercial Realty | Arbor Realty vs. PennyMac Mortgage Investment |
| ACRES Commercial vs. ACRES Commercial Realty | ACRES Commercial vs. Chimera Investment | ACRES Commercial vs. Cherry Hill Mortgage | ACRES Commercial vs. Cherry Hill Mortgage |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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