Correlation Between Ascott Residence and Medalist Diversified
Can any of the company-specific risk be diversified away by investing in both Ascott Residence and Medalist Diversified 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 Ascott Residence and Medalist Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascott Residence Trust and Medalist Diversified Reit, you can compare the effects of market volatilities on Ascott Residence and Medalist Diversified 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 Ascott Residence with a short position of Medalist Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascott Residence and Medalist Diversified.
Diversification Opportunities for Ascott Residence and Medalist Diversified
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ascott and Medalist is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ascott Residence Trust and Medalist Diversified Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medalist Diversified Reit and Ascott Residence 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 Ascott Residence Trust are associated (or correlated) with Medalist Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medalist Diversified Reit has no effect on the direction of Ascott Residence i.e., Ascott Residence and Medalist Diversified go up and down completely randomly.
Pair Corralation between Ascott Residence and Medalist Diversified
Assuming the 90 days horizon Ascott Residence is expected to generate 3.83 times less return on investment than Medalist Diversified. But when comparing it to its historical volatility, Ascott Residence Trust is 2.39 times less risky than Medalist Diversified. It trades about 0.03 of its potential returns per unit of risk. Medalist Diversified Reit is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,029 in Medalist Diversified Reit on November 5, 2024 and sell it today you would earn a total of 320.00 from holding Medalist Diversified Reit or generate 31.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.31% |
| Values | Daily Returns |
Ascott Residence Trust vs. Medalist Diversified Reit
Performance |
| Timeline |
| Ascott Residence Trust |
| Medalist Diversified Reit |
Ascott Residence and Medalist Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascott Residence and Medalist Diversified
The main advantage of trading using opposite Ascott Residence and Medalist Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascott Residence position performs unexpectedly, Medalist Diversified 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 Medalist Diversified will offset losses from the drop in Medalist Diversified's long position.| Ascott Residence vs. Global Net Lease, | Ascott Residence vs. Brightspire Capital | Ascott Residence vs. NexPoint Strategic Opportunities | Ascott Residence vs. Aquagold International |
| Medalist Diversified vs. Modiv Inc | Medalist Diversified vs. Presidio Property Trust | Medalist Diversified vs. Gladstone Commercial | Medalist Diversified vs. Generationome Properties |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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