Correlation Between Mid America and Independence Realty
Can any of the company-specific risk be diversified away by investing in both Mid America and Independence 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 Mid America and Independence Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid America Apartment Communities and Independence Realty Trust, you can compare the effects of market volatilities on Mid America and Independence 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 Mid America with a short position of Independence Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid America and Independence Realty.
Diversification Opportunities for Mid America and Independence Realty
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mid and Independence is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Mid America Apartment Communit and Independence Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Realty Trust and Mid America 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 Mid America Apartment Communities are associated (or correlated) with Independence Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Realty Trust has no effect on the direction of Mid America i.e., Mid America and Independence Realty go up and down completely randomly.
Pair Corralation between Mid America and Independence Realty
Considering the 90-day investment horizon Mid America Apartment Communities is expected to generate 0.95 times more return on investment than Independence Realty. However, Mid America Apartment Communities is 1.05 times less risky than Independence Realty. It trades about -0.01 of its potential returns per unit of risk. Independence Realty Trust is currently generating about -0.1 per unit of risk. If you would invest 15,351 in Mid America Apartment Communities on November 4, 2024 and sell it today you would lose (93.00) from holding Mid America Apartment Communities or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid America Apartment Communit vs. Independence Realty Trust
Performance |
| Timeline |
| Mid America Apartment |
| Independence Realty Trust |
Mid America and Independence Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid America and Independence Realty
The main advantage of trading using opposite Mid America and Independence Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid America position performs unexpectedly, Independence 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 Independence Realty will offset losses from the drop in Independence Realty's long position.| Mid America vs. AvalonBay Communities | Mid America vs. Essex Property Trust | Mid America vs. Equity Residential | Mid America vs. UDR Inc |
| Independence Realty vs. Apartment Investment and | Independence Realty vs. Clipper Realty | Independence Realty vs. BRT Realty Trust | Independence Realty vs. UDR Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |