Correlation Between Precinct Properties and Armada Hoffler
Can any of the company-specific risk be diversified away by investing in both Precinct Properties and Armada Hoffler 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 Precinct Properties and Armada Hoffler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precinct Properties New and Armada Hoffler Properties, you can compare the effects of market volatilities on Precinct Properties and Armada Hoffler 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 Precinct Properties with a short position of Armada Hoffler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precinct Properties and Armada Hoffler.
Diversification Opportunities for Precinct Properties and Armada Hoffler
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Precinct and Armada is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Precinct Properties New and Armada Hoffler Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hoffler Properties and Precinct Properties 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 Precinct Properties New are associated (or correlated) with Armada Hoffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hoffler Properties has no effect on the direction of Precinct Properties i.e., Precinct Properties and Armada Hoffler go up and down completely randomly.
Pair Corralation between Precinct Properties and Armada Hoffler
Assuming the 90 days horizon Precinct Properties New is expected to generate 0.17 times more return on investment than Armada Hoffler. However, Precinct Properties New is 5.77 times less risky than Armada Hoffler. It trades about -0.13 of its potential returns per unit of risk. Armada Hoffler Properties is currently generating about -0.14 per unit of risk. If you would invest 68.00 in Precinct Properties New on October 26, 2024 and sell it today you would lose (1.00) from holding Precinct Properties New or give up 1.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Precinct Properties New vs. Armada Hoffler Properties
Performance |
Timeline |
Precinct Properties New |
Armada Hoffler Properties |
Precinct Properties and Armada Hoffler Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Precinct Properties and Armada Hoffler
The main advantage of trading using opposite Precinct Properties and Armada Hoffler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precinct Properties position performs unexpectedly, Armada Hoffler 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 Armada Hoffler will offset losses from the drop in Armada Hoffler's long position.Precinct Properties vs. Modiv Inc | Precinct Properties vs. Global Net Lease | Precinct Properties vs. NexPoint Diversified Real | Precinct Properties vs. Armada Hoffler Properties |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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