Correlation Between Applied Industrial and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Applied Industrial and Acadia 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 Applied Industrial and Acadia Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Industrial Technologies and Acadia Realty Trust, you can compare the effects of market volatilities on Applied Industrial and Acadia 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 Applied Industrial with a short position of Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Industrial and Acadia Realty.
Diversification Opportunities for Applied Industrial and Acadia Realty
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Applied and Acadia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Applied Industrial Technologie and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust and Applied Industrial 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 Applied Industrial Technologies are associated (or correlated) with Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Applied Industrial i.e., Applied Industrial and Acadia Realty go up and down completely randomly.
Pair Corralation between Applied Industrial and Acadia Realty
Considering the 90-day investment horizon Applied Industrial Technologies is expected to generate 1.23 times more return on investment than Acadia Realty. However, Applied Industrial is 1.23 times more volatile than Acadia Realty Trust. It trades about 0.14 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about 0.17 per unit of risk. If you would invest 15,208 in Applied Industrial Technologies on August 26, 2024 and sell it today you would earn a total of 12,503 from holding Applied Industrial Technologies or generate 82.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Industrial Technologie vs. Acadia Realty Trust
Performance |
| Timeline |
| Applied Industrial |
| Acadia Realty Trust |
Applied Industrial and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Industrial and Acadia Realty
The main advantage of trading using opposite Applied Industrial and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Industrial position performs unexpectedly, Acadia 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.| Applied Industrial vs. Core Main | Applied Industrial vs. WW Grainger | Applied Industrial vs. DXP Enterprises | Applied Industrial vs. SiteOne Landscape Supply |
| Acadia Realty vs. Site Centers Corp | Acadia Realty vs. Inventrust Properties Corp | Acadia Realty vs. Retail Opportunity Investments | Acadia Realty vs. Netstreit Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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