Correlation Between Agree Realty and Federal Realty
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Federal Realty 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 Federal Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Federal Realty Investment, you can compare the effects of market volatilities on Agree Realty and Federal Realty 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 Federal Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Federal Realty.
Diversification Opportunities for Agree Realty and Federal Realty
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agree and Federal is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Federal Realty Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Realty Investment 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 Federal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Realty Investment has no effect on the direction of Agree Realty i.e., Agree Realty and Federal Realty go up and down completely randomly.
Pair Corralation between Agree Realty and Federal Realty
Considering the 90-day investment horizon Agree Realty is expected to under-perform the Federal Realty. But the stock apears to be less risky and, when comparing its historical volatility, Agree Realty is 1.39 times less risky than Federal Realty. The stock trades about -0.05 of its potential returns per unit of risk. The Federal Realty Investment is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 10,539 in Federal Realty Investment on November 18, 2024 and sell it today you would lose (36.00) from holding Federal Realty Investment or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Federal Realty Investment
Performance |
| Timeline |
| Agree Realty |
| Federal Realty Investment |
Agree Realty and Federal Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Federal Realty
The main advantage of trading using opposite Agree Realty and Federal Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Federal Realty 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 Federal Realty will offset losses from the drop in Federal Realty's long position.| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Regency Centers | Agree Realty vs. Netstreit Corp | Agree Realty vs. Kimco Realty |
| Federal Realty vs. Agree Realty | Federal Realty vs. Regency Centers | Federal Realty vs. Netstreit Corp | Federal Realty vs. Kimco Realty |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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