Correlation Between Armada Hoffler and Brightspire Capital
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and Brightspire Capital 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 Brightspire Capital 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 Brightspire Capital, you can compare the effects of market volatilities on Armada Hoffler and Brightspire Capital 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 Brightspire Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and Brightspire Capital.
Diversification Opportunities for Armada Hoffler and Brightspire Capital
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armada and Brightspire is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and Brightspire Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightspire Capital 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 Brightspire Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightspire Capital has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and Brightspire Capital go up and down completely randomly.
Pair Corralation between Armada Hoffler and Brightspire Capital
Assuming the 90 days trading horizon Armada Hoffler Properties is expected to under-perform the Brightspire Capital. But the preferred stock apears to be less risky and, when comparing its historical volatility, Armada Hoffler Properties is 1.43 times less risky than Brightspire Capital. The preferred stock trades about -0.08 of its potential returns per unit of risk. The Brightspire Capital is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 566.00 in Brightspire Capital on November 1, 2024 and sell it today you would lose (2.00) from holding Brightspire Capital or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hoffler Properties vs. Brightspire Capital
Performance |
| Timeline |
| Armada Hoffler Properties |
| Brightspire Capital |
Armada Hoffler and Brightspire Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and Brightspire Capital
The main advantage of trading using opposite Armada Hoffler and Brightspire Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, Brightspire Capital 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 Brightspire Capital will offset losses from the drop in Brightspire Capital's long position.| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr |
| Brightspire Capital vs. Essential Properties Realty | Brightspire Capital vs. Armada Hflr Pr | Brightspire Capital vs. CTO Realty Growth | Brightspire Capital 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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