Correlation Between Armada Hoffler and Necessity Retail
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and Necessity Retail 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 Necessity Retail 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 Necessity Retail REIT, you can compare the effects of market volatilities on Armada Hoffler and Necessity Retail 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 Necessity Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and Necessity Retail.
Diversification Opportunities for Armada Hoffler and Necessity Retail
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Armada and Necessity is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and Necessity Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Necessity Retail REIT 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 Necessity Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Necessity Retail REIT has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and Necessity Retail go up and down completely randomly.
Pair Corralation between Armada Hoffler and Necessity Retail
Assuming the 90 days trading horizon Armada Hoffler is expected to generate 4.59 times less return on investment than Necessity Retail. In addition to that, Armada Hoffler is 1.08 times more volatile than Necessity Retail REIT. It trades about 0.04 of its total potential returns per unit of risk. Necessity Retail REIT is currently generating about 0.22 per unit of volatility. If you would invest 1,956 in Necessity Retail REIT on August 27, 2024 and sell it today you would earn a total of 149.00 from holding Necessity Retail REIT or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.12% |
| Values | Daily Returns |
Armada Hoffler Properties vs. Necessity Retail REIT
Performance |
| Timeline |
| Armada Hoffler Properties |
| Necessity Retail REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Armada Hoffler and Necessity Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and Necessity Retail
The main advantage of trading using opposite Armada Hoffler and Necessity Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, Necessity Retail 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 Necessity Retail will offset losses from the drop in Necessity Retail's long position.| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr |
| Necessity Retail vs. SiriusPoint | Necessity Retail vs. RLJ Lodging Trust | Necessity Retail vs. New York Mortgage | Necessity Retail vs. Global 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 Stocks Directory module to find actively traded stocks across global markets.
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