Correlation Between Camden Property and Clipper Realty
Can any of the company-specific risk be diversified away by investing in both Camden Property and Clipper Realty 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 Camden Property and Clipper Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camden Property Trust and Clipper Realty, you can compare the effects of market volatilities on Camden Property and Clipper Realty 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 Camden Property with a short position of Clipper Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camden Property and Clipper Realty.
Diversification Opportunities for Camden Property and Clipper Realty
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Camden and Clipper is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Camden Property Trust and Clipper Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Realty and Camden Property 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 Camden Property Trust are associated (or correlated) with Clipper Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Realty has no effect on the direction of Camden Property i.e., Camden Property and Clipper Realty go up and down completely randomly.
Pair Corralation between Camden Property and Clipper Realty
Considering the 90-day investment horizon Camden Property is expected to generate 16.28 times less return on investment than Clipper Realty. But when comparing it to its historical volatility, Camden Property Trust is 2.92 times less risky than Clipper Realty. It trades about 0.01 of its potential returns per unit of risk. Clipper Realty is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Clipper Realty on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Clipper Realty or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camden Property Trust vs. Clipper Realty
Performance |
| Timeline |
| Camden Property Trust |
| Clipper Realty |
Camden Property and Clipper Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camden Property and Clipper Realty
The main advantage of trading using opposite Camden Property and Clipper Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camden Property position performs unexpectedly, Clipper Realty 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 Clipper Realty will offset losses from the drop in Clipper Realty's long position.| Camden Property vs. Clipper Realty | Camden Property vs. Centerspace | Camden Property vs. Equity Lifestyle Properties | Camden Property vs. Elme Communities |
| Clipper Realty vs. Nexpoint Residential Trust | Clipper Realty vs. Centerspace | Clipper Realty vs. UDR Inc | Clipper Realty vs. BRT Realty Trust |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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