Correlation Between Agree Realty and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Affiliated Managers 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 Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Affiliated Managers Group,, you can compare the effects of market volatilities on Agree Realty and Affiliated Managers 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 Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Affiliated Managers.
Diversification Opportunities for Agree Realty and Affiliated Managers
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agree and Affiliated is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Affiliated Managers Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Agree Realty i.e., Agree Realty and Affiliated Managers go up and down completely randomly.
Pair Corralation between Agree Realty and Affiliated Managers
Assuming the 90 days trading horizon Agree Realty is expected to under-perform the Affiliated Managers. In addition to that, Agree Realty is 1.32 times more volatile than Affiliated Managers Group,. It trades about -0.03 of its total potential returns per unit of risk. Affiliated Managers Group, is currently generating about -0.02 per unit of volatility. If you would invest 1,952 in Affiliated Managers Group, on August 24, 2024 and sell it today you would lose (24.00) from holding Affiliated Managers Group, or give up 1.23% 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. Affiliated Managers Group,
Performance |
| Timeline |
| Agree Realty |
| Affiliated Managers |
Agree Realty and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Affiliated Managers
The main advantage of trading using opposite Agree Realty and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' 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 |
| Affiliated Managers vs. Affiliated Managers Group | Affiliated Managers vs. Southern Company Series | Affiliated Managers vs. DTE Energy | Affiliated Managers vs. United States Cellular |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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