Correlation Between Armada Hoffler and Spirit Realty
Can any of the company-specific risk be diversified away by investing in both Armada Hoffler and Spirit 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 Spirit 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 Spirit Realty Capital, you can compare the effects of market volatilities on Armada Hoffler and Spirit 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 Spirit Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hoffler and Spirit Realty.
Diversification Opportunities for Armada Hoffler and Spirit Realty
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Armada and Spirit is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hoffler Properties and Spirit Realty Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Realty 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 Spirit Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Realty Capital has no effect on the direction of Armada Hoffler i.e., Armada Hoffler and Spirit Realty go up and down completely randomly.
Pair Corralation between Armada Hoffler and Spirit Realty
Assuming the 90 days trading horizon Armada Hoffler is expected to generate 1.07 times less return on investment than Spirit Realty. But when comparing it to its historical volatility, Armada Hoffler Properties is 1.16 times less risky than Spirit Realty. It trades about 0.05 of its potential returns per unit of risk. Spirit Realty Capital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,855 in Spirit Realty Capital on August 24, 2024 and sell it today you would earn a total of 333.00 from holding Spirit Realty Capital or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Armada Hoffler Properties vs. Spirit Realty Capital
Performance |
| Timeline |
| Armada Hoffler Properties |
| Spirit Realty Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Armada Hoffler and Spirit Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hoffler and Spirit Realty
The main advantage of trading using opposite Armada Hoffler and Spirit Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hoffler position performs unexpectedly, Spirit 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 Spirit Realty will offset losses from the drop in Spirit Realty's long position.| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr | Armada Hoffler vs. Aquagold International |
| Spirit Realty vs. Broadstone Net Lease | Spirit Realty vs. Armada Hflr Pr | Spirit Realty vs. Brightspire Capital | Spirit Realty vs. Safehold |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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