Correlation Between Agree Realty and American Healthcare
Can any of the company-specific risk be diversified away by investing in both Agree Realty and American Healthcare 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 American Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and American Healthcare REIT,, you can compare the effects of market volatilities on Agree Realty and American Healthcare 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 American Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and American Healthcare.
Diversification Opportunities for Agree Realty and American Healthcare
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agree and American is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and American Healthcare REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Healthcare REIT, 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 American Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Healthcare REIT, has no effect on the direction of Agree Realty i.e., Agree Realty and American Healthcare go up and down completely randomly.
Pair Corralation between Agree Realty and American Healthcare
Considering the 90-day investment horizon Agree Realty is expected to generate 2.21 times less return on investment than American Healthcare. But when comparing it to its historical volatility, Agree Realty is 2.19 times less risky than American Healthcare. It trades about 0.25 of its potential returns per unit of risk. American Healthcare REIT, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,636 in American Healthcare REIT, on August 30, 2024 and sell it today you would earn a total of 321.00 from holding American Healthcare REIT, or generate 12.18% 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. American Healthcare REIT,
Performance |
| Timeline |
| Agree Realty |
| American Healthcare REIT, |
Agree Realty and American Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and American Healthcare
The main advantage of trading using opposite Agree Realty and American Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, American Healthcare 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 American Healthcare will offset losses from the drop in American Healthcare's long position.| Agree Realty vs. Saul Centers | Agree Realty vs. Site Centers Corp | Agree Realty vs. Acadia Realty Trust | Agree Realty vs. Retail Opportunity Investments |
| American Healthcare vs. Boston Properties | American Healthcare vs. Douglas Emmett | American Healthcare vs. Kilroy Realty Corp | American Healthcare vs. Highwoods Properties |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |