Correlation Between Acadia Realty and Macerich
Can any of the company-specific risk be diversified away by investing in both Acadia Realty and Macerich 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 Acadia Realty and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Realty Trust and Macerich Company, you can compare the effects of market volatilities on Acadia Realty and Macerich 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 Acadia Realty with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Realty and Macerich.
Diversification Opportunities for Acadia Realty and Macerich
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Acadia and Macerich is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Realty Trust and Macerich Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and Acadia Realty 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 Acadia Realty Trust are associated (or correlated) with Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Acadia Realty i.e., Acadia Realty and Macerich go up and down completely randomly.
Pair Corralation between Acadia Realty and Macerich
Considering the 90-day investment horizon Acadia Realty is expected to generate 1.94 times less return on investment than Macerich. But when comparing it to its historical volatility, Acadia Realty Trust is 1.62 times less risky than Macerich. It trades about 0.22 of its potential returns per unit of risk. Macerich Company is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,794 in Macerich Company on August 26, 2024 and sell it today you would earn a total of 178.00 from holding Macerich Company or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Realty Trust vs. Macerich Company
Performance |
| Timeline |
| Acadia Realty Trust |
| Macerich |
Acadia Realty and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Realty and Macerich
The main advantage of trading using opposite Acadia Realty and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Realty position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Acadia Realty vs. Site Centers Corp | Acadia Realty vs. Inventrust Properties Corp | Acadia Realty vs. Retail Opportunity Investments | Acadia Realty vs. Netstreit Corp |
| Macerich vs. Site Centers Corp | Macerich vs. Inventrust Properties Corp | Macerich vs. Retail Opportunity Investments | Macerich 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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