Correlation Between Farmland Partners and American Tower
Can any of the company-specific risk be diversified away by investing in both Farmland Partners 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 Farmland Partners and American Tower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmland Partners and American Tower Corp, you can compare the effects of market volatilities on Farmland Partners 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 Farmland Partners with a short position of American Tower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmland Partners and American Tower.
Diversification Opportunities for Farmland Partners and American Tower
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Farmland and American is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Farmland Partners 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 Farmland Partners 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 Farmland Partners 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 Farmland Partners i.e., Farmland Partners and American Tower go up and down completely randomly.
Pair Corralation between Farmland Partners and American Tower
Considering the 90-day investment horizon Farmland Partners is expected to generate 1.0 times more return on investment than American Tower. However, Farmland Partners is 1.0 times less risky than American Tower. It trades about 0.08 of its potential returns per unit of risk. American Tower Corp is currently generating about 0.06 per unit of risk. If you would invest 1,078 in Farmland Partners on August 24, 2024 and sell it today you would earn a total of 157.00 from holding Farmland Partners or generate 14.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmland Partners vs. American Tower Corp
Performance |
| Timeline |
| Farmland Partners |
| American Tower Corp |
Farmland Partners and American Tower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmland Partners and American Tower
The main advantage of trading using opposite Farmland Partners and American Tower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmland Partners 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.| Farmland Partners vs. Crown Castle | Farmland Partners vs. American Tower Corp | Farmland Partners vs. Hannon Armstrong Sustainable | Farmland Partners vs. Digital Realty Trust |
| 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 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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