Correlation Between Armada Hoffler and CTO Realty
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and CTO Realty 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 CTO Realty 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 CTO Realty Growth, you can compare the effects of market volatilities on Armada Hoffler and CTO Realty 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 CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and CTO Realty.
Diversification Opportunities for Armada Hoffler and CTO Realty
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Armada and CTO is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth 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 CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and CTO Realty go up and down completely randomly.
Pair Corralation between Armada Hoffler and CTO Realty
Assuming the 90 days trading horizon Armada Hoffler Properties is expected to under-perform the CTO Realty. But the preferred stock apears to be less risky and, when comparing its historical volatility, Armada Hoffler Properties is 1.28 times less risky than CTO Realty. The preferred stock trades about -0.17 of its potential returns per unit of risk. The CTO Realty Growth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,955 in CTO Realty Growth on August 24, 2024 and sell it today you would earn a total of 11.00 from holding CTO Realty Growth or generate 0.56% 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. CTO Realty Growth
Performance |
| Timeline |
| Armada Hoffler Properties |
| CTO Realty Growth |
Armada Hoffler and CTO Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and CTO Realty
The main advantage of trading using opposite Armada Hoffler and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, CTO Realty 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 CTO Realty will offset losses from the drop in CTO Realty's long position.| Armada Hoffler vs. Armada Hflr Pr | Armada Hoffler vs. HUMANA INC | Armada Hoffler vs. Aquagold International | Armada Hoffler vs. Barloworld Ltd ADR |
| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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