Correlation Between Apartment Income and Equity Lifestyle
Can any of the company-specific risk be diversified away by investing in both Apartment Income 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 Apartment Income and Equity Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apartment Income REIT and Equity Lifestyle Properties, you can compare the effects of market volatilities on Apartment Income 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 Apartment Income with a short position of Equity Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apartment Income and Equity Lifestyle.
Diversification Opportunities for Apartment Income and Equity Lifestyle
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apartment and Equity is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Apartment Income REIT 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 Apartment Income 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 Apartment Income REIT 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 Apartment Income i.e., Apartment Income and Equity Lifestyle go up and down completely randomly.
Pair Corralation between Apartment Income and Equity Lifestyle
Given the investment horizon of 90 days Apartment Income REIT is expected to generate 1.99 times more return on investment than Equity Lifestyle. However, Apartment Income is 1.99 times more volatile than Equity Lifestyle Properties. It trades about 0.1 of its potential returns per unit of risk. Equity Lifestyle Properties is currently generating about 0.01 per unit of risk. If you would invest 3,180 in Apartment Income REIT on November 4, 2024 and sell it today you would earn a total of 728.00 from holding Apartment Income REIT or generate 22.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.68% |
| Values | Daily Returns |
Apartment Income REIT vs. Equity Lifestyle Properties
Performance |
| Timeline |
| Apartment Income REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Equity Lifestyle Pro |
Apartment Income and Equity Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apartment Income and Equity Lifestyle
The main advantage of trading using opposite Apartment Income and Equity Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apartment Income 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.| Apartment Income vs. Clipper Realty | Apartment Income vs. UDR Inc | Apartment Income vs. Nexpoint Residential Trust | Apartment Income vs. BRT Realty Trust |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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