Correlation Between Armada Hflr and Equity Lifestyle
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Equity Lifestyle 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 Hflr and Equity Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Hflr Pr and Equity Lifestyle Properties, you can compare the effects of market volatilities on Armada Hflr and Equity Lifestyle 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 Hflr with a short position of Equity Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Equity Lifestyle.
Diversification Opportunities for Armada Hflr and Equity Lifestyle
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Armada and Equity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Equity Lifestyle Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Lifestyle Pro and Armada Hflr 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 Hflr Pr are associated (or correlated) with Equity Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Lifestyle Pro has no effect on the direction of Armada Hflr i.e., Armada Hflr and Equity Lifestyle go up and down completely randomly.
Pair Corralation between Armada Hflr and Equity Lifestyle
Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the Equity Lifestyle. In addition to that, Armada Hflr is 1.21 times more volatile than Equity Lifestyle Properties. It trades about -0.01 of its total potential returns per unit of risk. Equity Lifestyle Properties is currently generating about 0.01 per unit of volatility. If you would invest 6,439 in Equity Lifestyle Properties on October 24, 2024 and sell it today you would earn a total of 148.50 from holding Equity Lifestyle Properties or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. Equity Lifestyle Properties
Performance |
| Timeline |
| Armada Hflr Pr |
| Equity Lifestyle Pro |
Armada Hflr and Equity Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Equity Lifestyle
The main advantage of trading using opposite Armada Hflr and Equity Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Equity Lifestyle 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 Equity Lifestyle will offset losses from the drop in Equity Lifestyle's long position.| Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
| Equity Lifestyle vs. UMH Properties | Equity Lifestyle vs. UDR Inc | Equity Lifestyle vs. AvalonBay Communities | Equity Lifestyle vs. Nexpoint Residential Trust |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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