Correlation Between Agree Realty and Retail Opportunity
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Retail Opportunity 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 Retail Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Retail Opportunity Investments, you can compare the effects of market volatilities on Agree Realty and Retail Opportunity 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 Retail Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Retail Opportunity.
Diversification Opportunities for Agree Realty and Retail Opportunity
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agree and Retail is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Retail Opportunity Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Opportunity 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 Retail Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Opportunity has no effect on the direction of Agree Realty i.e., Agree Realty and Retail Opportunity go up and down completely randomly.
Pair Corralation between Agree Realty and Retail Opportunity
Considering the 90-day investment horizon Agree Realty is expected to generate 3.62 times less return on investment than Retail Opportunity. But when comparing it to its historical volatility, Agree Realty is 2.01 times less risky than Retail Opportunity. It trades about 0.14 of its potential returns per unit of risk. Retail Opportunity Investments is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,566 in Retail Opportunity Investments on August 28, 2024 and sell it today you would earn a total of 174.00 from holding Retail Opportunity Investments or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Retail Opportunity Investments
Performance |
| Timeline |
| Agree Realty |
| Retail Opportunity |
Agree Realty and Retail Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Retail Opportunity
The main advantage of trading using opposite Agree Realty and Retail Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Retail Opportunity 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 Retail Opportunity will offset losses from the drop in Retail Opportunity's long position.| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Regency Centers | Agree Realty vs. Netstreit Corp | Agree Realty vs. Kimco Realty |
| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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