Correlation Between Armada Hoffler and Essential Properties
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and Essential Properties 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 Essential Properties 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 Essential Properties Realty, you can compare the effects of market volatilities on Armada Hoffler and Essential Properties 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 Essential Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and Essential Properties.
Diversification Opportunities for Armada Hoffler and Essential Properties
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armada and Essential is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and Essential Properties Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essential Properties 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 Essential Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essential Properties has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and Essential Properties go up and down completely randomly.
Pair Corralation between Armada Hoffler and Essential Properties
Assuming the 90 days trading horizon Armada Hoffler is expected to generate 4.12 times less return on investment than Essential Properties. But when comparing it to its historical volatility, Armada Hoffler Properties is 1.29 times less risky than Essential Properties. It trades about 0.04 of its potential returns per unit of risk. Essential Properties Realty is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,417 in Essential Properties Realty on August 28, 2024 and sell it today you would earn a total of 965.00 from holding Essential Properties Realty or generate 39.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hoffler Properties vs. Essential Properties Realty
Performance |
| Timeline |
| Armada Hoffler Properties |
| Essential Properties |
Armada Hoffler and Essential Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and Essential Properties
The main advantage of trading using opposite Armada Hoffler and Essential Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, Essential Properties 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 Essential Properties will offset losses from the drop in Essential Properties' long position.| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr | Armada Hoffler vs. Aquagold International |
| Essential Properties vs. Armada Hflr Pr | Essential Properties vs. CTO Realty Growth | Essential Properties vs. Brightspire Capital | Essential Properties 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |