Correlation Between Alexandria Real and American Tower
Can any of the company-specific risk be diversified away by investing in both Alexandria Real and American Tower 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 Alexandria Real and American Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexandria Real Estate and American Tower Corp, you can compare the effects of market volatilities on Alexandria Real and American Tower 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 Alexandria Real with a short position of American Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria Real and American Tower.
Diversification Opportunities for Alexandria Real and American Tower
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alexandria and American is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria Real Estate and American Tower Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Tower Corp and Alexandria Real 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 Alexandria Real Estate are associated (or correlated) with American Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Tower Corp has no effect on the direction of Alexandria Real i.e., Alexandria Real and American Tower go up and down completely randomly.
Pair Corralation between Alexandria Real and American Tower
Considering the 90-day investment horizon Alexandria Real Estate is expected to generate 0.81 times more return on investment than American Tower. However, Alexandria Real Estate is 1.23 times less risky than American Tower. It trades about -0.02 of its potential returns per unit of risk. American Tower Corp is currently generating about -0.03 per unit of risk. If you would invest 11,165 in Alexandria Real Estate on August 30, 2024 and sell it today you would lose (113.00) from holding Alexandria Real Estate or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alexandria Real Estate vs. American Tower Corp
Performance |
| Timeline |
| Alexandria Real Estate |
| American Tower Corp |
Alexandria Real and American Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexandria Real and American Tower
The main advantage of trading using opposite Alexandria Real and American Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexandria Real position performs unexpectedly, American Tower 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 American Tower will offset losses from the drop in American Tower's long position.| Alexandria Real vs. Boston Properties | Alexandria Real vs. Douglas Emmett | Alexandria Real vs. Kilroy Realty Corp | Alexandria Real vs. Highwoods Properties |
| American Tower vs. Digital Realty Trust | American Tower vs. Equinix | American Tower vs. SBA Communications Corp | American Tower vs. Iron Mountain Incorporated |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |