Correlation Between AFC Gamma and Farmland Partners
Can any of the company-specific risk be diversified away by investing in both AFC Gamma and Farmland Partners 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 AFC Gamma and Farmland Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Gamma and Farmland Partners, you can compare the effects of market volatilities on AFC Gamma and Farmland Partners 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 AFC Gamma with a short position of Farmland Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Gamma and Farmland Partners.
Diversification Opportunities for AFC Gamma and Farmland Partners
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AFC and Farmland is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding AFC Gamma and Farmland Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmland Partners and AFC Gamma 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 AFC Gamma are associated (or correlated) with Farmland Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmland Partners has no effect on the direction of AFC Gamma i.e., AFC Gamma and Farmland Partners go up and down completely randomly.
Pair Corralation between AFC Gamma and Farmland Partners
Given the investment horizon of 90 days AFC Gamma is expected to under-perform the Farmland Partners. In addition to that, AFC Gamma is 1.05 times more volatile than Farmland Partners. It trades about -0.12 of its total potential returns per unit of risk. Farmland Partners is currently generating about -0.01 per unit of volatility. If you would invest 1,176 in Farmland Partners on November 2, 2024 and sell it today you would lose (5.00) from holding Farmland Partners or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFC Gamma vs. Farmland Partners
Performance |
| Timeline |
| AFC Gamma |
| Farmland Partners |
AFC Gamma and Farmland Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Gamma and Farmland Partners
The main advantage of trading using opposite AFC Gamma and Farmland Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Gamma position performs unexpectedly, Farmland Partners 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 Farmland Partners will offset losses from the drop in Farmland Partners' long position.| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
| Farmland Partners vs. PotlatchDeltic Corp | Farmland Partners vs. Weyerhaeuser | Farmland Partners vs. Outfront Media | Farmland Partners vs. Gaming Leisure 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |