Correlation Between Ascott Residence and One Liberty
Can any of the company-specific risk be diversified away by investing in both Ascott Residence and One Liberty 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 One Liberty 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 One Liberty Properties, you can compare the effects of market volatilities on Ascott Residence and One Liberty 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 One Liberty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascott Residence and One Liberty.
Diversification Opportunities for Ascott Residence and One Liberty
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ascott and One is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ascott Residence Trust and One Liberty Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Liberty Properties 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 One Liberty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Liberty Properties has no effect on the direction of Ascott Residence i.e., Ascott Residence and One Liberty go up and down completely randomly.
Pair Corralation between Ascott Residence and One Liberty
Assuming the 90 days horizon Ascott Residence is expected to generate 2.96 times less return on investment than One Liberty. But when comparing it to its historical volatility, Ascott Residence Trust is 1.48 times less risky than One Liberty. It trades about 0.03 of its potential returns per unit of risk. One Liberty Properties is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,023 in One Liberty Properties on November 5, 2024 and sell it today you would earn a total of 544.00 from holding One Liberty Properties or generate 26.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascott Residence Trust vs. One Liberty Properties
Performance |
| Timeline |
| Ascott Residence Trust |
| One Liberty Properties |
Ascott Residence and One Liberty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascott Residence and One Liberty
The main advantage of trading using opposite Ascott Residence and One Liberty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascott Residence position performs unexpectedly, One Liberty 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 One Liberty will offset losses from the drop in One Liberty'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 |
| One Liberty vs. Generationome Properties | One Liberty vs. Modiv Inc | One Liberty vs. Armada Hflr Pr | One Liberty vs. NexPoint Diversified Real |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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