Correlation Between Agree Realty and EPR Properties
Can any of the company-specific risk be diversified away by investing in both Agree Realty and EPR Properties 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 EPR Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and EPR Properties, you can compare the effects of market volatilities on Agree Realty and EPR Properties 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 EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and EPR Properties.
Diversification Opportunities for Agree Realty and EPR Properties
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agree and EPR is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 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 EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Agree Realty i.e., Agree Realty and EPR Properties go up and down completely randomly.
Pair Corralation between Agree Realty and EPR Properties
Assuming the 90 days trading horizon Agree Realty is expected to under-perform the EPR Properties. But the preferred stock apears to be less risky and, when comparing its historical volatility, Agree Realty is 1.25 times less risky than EPR Properties. The preferred stock trades about -0.12 of its potential returns per unit of risk. The EPR Properties is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 2,171 in EPR Properties on August 31, 2024 and sell it today you would lose (40.00) from holding EPR Properties or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. EPR Properties
Performance |
| Timeline |
| Agree Realty |
| EPR Properties |
Agree Realty and EPR Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and EPR Properties
The main advantage of trading using opposite Agree Realty and EPR Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, EPR Properties 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 EPR Properties will offset losses from the drop in EPR Properties' long position.| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Vornado Realty Trust | Agree Realty vs. Rexford Industrial Realty | Agree Realty vs. Digital Realty Trust |
| EPR Properties vs. EPR Properties Series | EPR Properties vs. EPR Properties | EPR Properties vs. Lexington Realty Trust | EPR Properties vs. Aquagold International |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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