Correlation Between Armada Hoffler and British Land
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and British Land 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 British Land 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 British Land, you can compare the effects of market volatilities on Armada Hoffler and British Land 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 British Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and British Land.
Diversification Opportunities for Armada Hoffler and British Land
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Armada and British is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and British Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British Land 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 British Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British Land has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and British Land go up and down completely randomly.
Pair Corralation between Armada Hoffler and British Land
Assuming the 90 days trading horizon Armada Hoffler is expected to generate 1.06 times less return on investment than British Land. But when comparing it to its historical volatility, Armada Hoffler Properties is 2.8 times less risky than British Land. It trades about 0.06 of its potential returns per unit of risk. British Land is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 548.00 in British Land on August 30, 2024 and sell it today you would earn a total of 21.00 from holding British Land or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hoffler Properties vs. British Land
Performance |
| Timeline |
| Armada Hoffler Properties |
| British Land |
Armada Hoffler and British Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and British Land
The main advantage of trading using opposite Armada Hoffler and British Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, British Land 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 British Land will offset losses from the drop in British Land's long position.| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr |
| British Land vs. Modiv Inc | British Land vs. Global Net Lease | British Land vs. NexPoint Diversified Real | British Land vs. Armada Hoffler 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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