Correlation Between Alexandria Real and Cousins Properties
Can any of the company-specific risk be diversified away by investing in both Alexandria Real and Cousins Properties 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 Cousins Properties 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 Cousins Properties Incorporated, you can compare the effects of market volatilities on Alexandria Real and Cousins Properties 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 Cousins Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria Real and Cousins Properties.
Diversification Opportunities for Alexandria Real and Cousins Properties
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alexandria and Cousins is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria Real Estate and Cousins Properties Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cousins Properties 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 Cousins Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cousins Properties has no effect on the direction of Alexandria Real i.e., Alexandria Real and Cousins Properties go up and down completely randomly.
Pair Corralation between Alexandria Real and Cousins Properties
Considering the 90-day investment horizon Alexandria Real Estate is expected to under-perform the Cousins Properties. In addition to that, Alexandria Real is 1.04 times more volatile than Cousins Properties Incorporated. It trades about -0.03 of its total potential returns per unit of risk. Cousins Properties Incorporated is currently generating about 0.14 per unit of volatility. If you would invest 2,193 in Cousins Properties Incorporated on August 27, 2024 and sell it today you would earn a total of 979.00 from holding Cousins Properties Incorporated or generate 44.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alexandria Real Estate vs. Cousins Properties Incorporate
Performance |
| Timeline |
| Alexandria Real Estate |
| Cousins Properties |
Alexandria Real and Cousins Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexandria Real and Cousins Properties
The main advantage of trading using opposite Alexandria Real and Cousins Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexandria Real position performs unexpectedly, Cousins Properties 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 Cousins Properties will offset losses from the drop in Cousins Properties' long position.| Alexandria Real vs. Vornado Realty Trust | Alexandria Real vs. SL Green Realty | Alexandria Real vs. Kilroy Realty Corp | Alexandria Real vs. Highwoods Properties |
| Cousins Properties vs. Highwoods Properties | Cousins Properties vs. Douglas Emmett | Cousins Properties vs. Equity Commonwealth | Cousins Properties vs. Kilroy Realty 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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