Correlation Between Armada Hoffler and Ascott Residence
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and Ascott Residence 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 Armada Hoffler and Ascott Residence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hoffler Properties and Ascott Residence Trust, you can compare the effects of market volatilities on Armada Hoffler and Ascott Residence 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 Armada Hoffler with a short position of Ascott Residence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and Ascott Residence.
Diversification Opportunities for Armada Hoffler and Ascott Residence
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Armada and Ascott is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and Ascott Residence Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascott Residence Trust and Armada Hoffler 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 Armada Hoffler Properties are associated (or correlated) with Ascott Residence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascott Residence Trust has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and Ascott Residence go up and down completely randomly.
Pair Corralation between Armada Hoffler and Ascott Residence
Assuming the 90 days trading horizon Armada Hoffler Properties is expected to generate 0.87 times more return on investment than Ascott Residence. However, Armada Hoffler Properties is 1.15 times less risky than Ascott Residence. It trades about 0.04 of its potential returns per unit of risk. Ascott Residence Trust is currently generating about 0.02 per unit of risk. If you would invest 2,057 in Armada Hoffler Properties on August 28, 2024 and sell it today you would earn a total of 303.00 from holding Armada Hoffler Properties or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hoffler Properties vs. Ascott Residence Trust
Performance |
| Timeline |
| Armada Hoffler Properties |
| Ascott Residence Trust |
Armada Hoffler and Ascott Residence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and Ascott Residence
The main advantage of trading using opposite Armada Hoffler and Ascott Residence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, Ascott Residence 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 Ascott Residence will offset losses from the drop in Ascott Residence's long position.| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr | Armada Hoffler vs. Aquagold International |
| Ascott Residence vs. Armada Hoffler Properties | Ascott Residence vs. Artis REIT | Ascott Residence vs. Armada Hflr Pr | Ascott Residence vs. Modiv Inc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |