Correlation Between Agree Realty and Dunham Real
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Dunham Real 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 Agree Realty and Dunham Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Dunham Real Estate, you can compare the effects of market volatilities on Agree Realty and Dunham Real 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 Agree Realty with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Dunham Real.
Diversification Opportunities for Agree Realty and Dunham Real
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agree and DUNHAM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Agree 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 Agree Realty are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Agree Realty i.e., Agree Realty and Dunham Real go up and down completely randomly.
Pair Corralation between Agree Realty and Dunham Real
Assuming the 90 days trading horizon Agree Realty is expected to under-perform the Dunham Real. But the preferred stock apears to be less risky and, when comparing its historical volatility, Agree Realty is 1.01 times less risky than Dunham Real. The preferred stock trades about -0.27 of its potential returns per unit of risk. The Dunham Real Estate is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,512 in Dunham Real Estate on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Dunham Real Estate or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Dunham Real Estate
Performance |
| Timeline |
| Agree Realty |
| Dunham Real Estate |
Agree Realty and Dunham Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Dunham Real
The main advantage of trading using opposite Agree Realty and Dunham Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Dunham Real 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 Dunham Real will offset losses from the drop in Dunham Real's long position.| Agree Realty vs. Vornado Realty Trust | Agree Realty vs. Rexford Industrial Realty | Agree Realty vs. Global Medical REIT | Agree Realty vs. Aquagold International |
| Dunham Real vs. Realty Income | Dunham Real vs. Dynex Capital | Dunham Real vs. First Industrial Realty | Dunham Real vs. Healthcare Realty Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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