Correlation Between Clipper Realty and Sun Communities
Can any of the company-specific risk be diversified away by investing in both Clipper Realty and Sun Communities 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 Clipper Realty and Sun Communities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipper Realty and Sun Communities, you can compare the effects of market volatilities on Clipper Realty and Sun Communities 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 Clipper Realty with a short position of Sun Communities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipper Realty and Sun Communities.
Diversification Opportunities for Clipper Realty and Sun Communities
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Clipper and Sun is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Clipper Realty and Sun Communities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Communities and Clipper Realty 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 Clipper Realty are associated (or correlated) with Sun Communities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Communities has no effect on the direction of Clipper Realty i.e., Clipper Realty and Sun Communities go up and down completely randomly.
Pair Corralation between Clipper Realty and Sun Communities
Given the investment horizon of 90 days Clipper Realty is expected to under-perform the Sun Communities. In addition to that, Clipper Realty is 1.97 times more volatile than Sun Communities. It trades about -0.29 of its total potential returns per unit of risk. Sun Communities is currently generating about -0.08 per unit of volatility. If you would invest 13,195 in Sun Communities on August 29, 2024 and sell it today you would lose (492.00) from holding Sun Communities or give up 3.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clipper Realty vs. Sun Communities
Performance |
| Timeline |
| Clipper Realty |
| Sun Communities |
Clipper Realty and Sun Communities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipper Realty and Sun Communities
The main advantage of trading using opposite Clipper Realty and Sun Communities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipper Realty position performs unexpectedly, Sun Communities 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 Sun Communities will offset losses from the drop in Sun Communities' long position.| Clipper Realty vs. Nexpoint Residential Trust | Clipper Realty vs. Centerspace | Clipper Realty vs. UDR Inc | Clipper Realty vs. BRT Realty Trust |
| Sun Communities vs. Clipper Realty | Sun Communities vs. UDR Inc | Sun Communities vs. UMH Properties | Sun Communities vs. American Homes 4 |
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 Stocks Directory module to find actively traded stocks across global markets.
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