Correlation Between Agree Realty and Tejon Ranch
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Tejon Ranch 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 Tejon Ranch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Tejon Ranch Co, you can compare the effects of market volatilities on Agree Realty and Tejon Ranch 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 Tejon Ranch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Tejon Ranch.
Diversification Opportunities for Agree Realty and Tejon Ranch
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agree and Tejon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Tejon Ranch Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tejon Ranch 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 Tejon Ranch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tejon Ranch has no effect on the direction of Agree Realty i.e., Agree Realty and Tejon Ranch go up and down completely randomly.
Pair Corralation between Agree Realty and Tejon Ranch
Considering the 90-day investment horizon Agree Realty is expected to generate 0.3 times more return on investment than Tejon Ranch. However, Agree Realty is 3.32 times less risky than Tejon Ranch. It trades about 0.19 of its potential returns per unit of risk. Tejon Ranch Co is currently generating about 0.01 per unit of risk. If you would invest 7,479 in Agree Realty on August 31, 2024 and sell it today you would earn a total of 286.00 from holding Agree Realty or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Tejon Ranch Co
Performance |
| Timeline |
| Agree Realty |
| Tejon Ranch |
Agree Realty and Tejon Ranch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Tejon Ranch
The main advantage of trading using opposite Agree Realty and Tejon Ranch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Tejon Ranch 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 Tejon Ranch will offset losses from the drop in Tejon Ranch's long position.| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Regency Centers | Agree Realty vs. Netstreit Corp | Agree Realty vs. Kimco Realty |
| Tejon Ranch vs. Steel Partners Holdings | Tejon Ranch vs. Compass Diversified | Tejon Ranch vs. Brookfield Business Partners | Tejon Ranch vs. Matthews 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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