Correlation Between Armada Hflr and Empire State
Can any of the company-specific risk be diversified away by investing in both Armada Hflr and Empire State 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 Empire State 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 Empire State Realty, you can compare the effects of market volatilities on Armada Hflr and Empire State 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 Empire State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Empire State.
Diversification Opportunities for Armada Hflr and Empire State
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Armada and Empire is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Empire State Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire State Realty 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 Empire State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire State Realty has no effect on the direction of Armada Hflr i.e., Armada Hflr and Empire State go up and down completely randomly.
Pair Corralation between Armada Hflr and Empire State
Considering the 90-day investment horizon Armada Hflr is expected to generate 10.52 times less return on investment than Empire State. But when comparing it to its historical volatility, Armada Hflr Pr is 1.11 times less risky than Empire State. It trades about 0.01 of its potential returns per unit of risk. Empire State Realty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 920.00 in Empire State Realty on September 3, 2024 and sell it today you would earn a total of 176.00 from holding Empire State Realty or generate 19.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Armada Hflr Pr vs. Empire State Realty
Performance |
| Timeline |
| Armada Hflr Pr |
| Empire State Realty |
Armada Hflr and Empire State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Hflr and Empire State
The main advantage of trading using opposite Armada Hflr and Empire State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr position performs unexpectedly, Empire State 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 Empire State will offset losses from the drop in Empire State'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 |
| Empire State vs. Broadstone Net Lease | Empire State vs. Armada Hflr Pr | Empire State vs. Brightspire Capital | Empire State 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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