Correlation Between Camden Property and Veris Residential
Can any of the company-specific risk be diversified away by investing in both Camden Property and Veris Residential 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 Veris Residential 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 Veris Residential, you can compare the effects of market volatilities on Camden Property and Veris Residential 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 Veris Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camden Property and Veris Residential.
Diversification Opportunities for Camden Property and Veris Residential
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Camden and Veris is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Camden Property Trust and Veris Residential in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veris Residential 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 Veris Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veris Residential has no effect on the direction of Camden Property i.e., Camden Property and Veris Residential go up and down completely randomly.
Pair Corralation between Camden Property and Veris Residential
Considering the 90-day investment horizon Camden Property is expected to generate 3.66 times less return on investment than Veris Residential. But when comparing it to its historical volatility, Camden Property Trust is 1.14 times less risky than Veris Residential. It trades about 0.02 of its potential returns per unit of risk. Veris Residential is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,727 in Veris Residential on August 31, 2024 and sell it today you would earn a total of 93.00 from holding Veris Residential or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camden Property Trust vs. Veris Residential
Performance |
| Timeline |
| Camden Property Trust |
| Veris Residential |
Camden Property and Veris Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camden Property and Veris Residential
The main advantage of trading using opposite Camden Property and Veris Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camden Property position performs unexpectedly, Veris Residential 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 Veris Residential will offset losses from the drop in Veris Residential's long position.| Camden Property vs. AvalonBay Communities | Camden Property vs. Essex Property Trust | Camden Property vs. Equity Residential | Camden Property vs. UDR Inc |
| Veris Residential vs. Urban Edge Properties | Veris Residential vs. Site Centers Corp | Veris Residential vs. JBG SMITH Properties | Veris Residential vs. Nexpoint Residential 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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