Correlation Between COPT Defense and American Tower
Can any of the company-specific risk be diversified away by investing in both COPT Defense 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 COPT Defense and American Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COPT Defense Properties and American Tower Corp, you can compare the effects of market volatilities on COPT Defense 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 COPT Defense with a short position of American Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of COPT Defense and American Tower.
Diversification Opportunities for COPT Defense and American Tower
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COPT and American is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding COPT Defense Properties 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 COPT Defense 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 COPT Defense Properties 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 COPT Defense i.e., COPT Defense and American Tower go up and down completely randomly.
Pair Corralation between COPT Defense and American Tower
Considering the 90-day investment horizon COPT Defense Properties is expected to generate 0.75 times more return on investment than American Tower. However, COPT Defense Properties is 1.34 times less risky than American Tower. It trades about 0.04 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 3,250 in COPT Defense Properties on August 30, 2024 and sell it today you would earn a total of 33.00 from holding COPT Defense Properties or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
COPT Defense Properties vs. American Tower Corp
Performance |
| Timeline |
| COPT Defense Properties |
| American Tower Corp |
COPT Defense and American Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COPT Defense and American Tower
The main advantage of trading using opposite COPT Defense and American Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPT Defense 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.| COPT Defense vs. Realty Income | COPT Defense vs. First Industrial Realty | COPT Defense vs. Healthcare Realty Trust | COPT Defense vs. Park Hotels Resorts |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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