Correlation Between Power REIT and Armada Hflr
Can any of the company-specific risk be diversified away by investing in both Power REIT and Armada Hflr 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 Power REIT and Armada Hflr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Armada Hflr Pr, you can compare the effects of market volatilities on Power REIT and Armada Hflr 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 Power REIT with a short position of Armada Hflr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Armada Hflr.
Diversification Opportunities for Power REIT and Armada Hflr
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Power and Armada is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT and Armada Hflr Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hflr Pr and Power REIT 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 Power REIT are associated (or correlated) with Armada Hflr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hflr Pr has no effect on the direction of Power REIT i.e., Power REIT and Armada Hflr go up and down completely randomly.
Pair Corralation between Power REIT and Armada Hflr
Allowing for the 90-day total investment horizon Power REIT is expected to generate 4.74 times more return on investment than Armada Hflr. However, Power REIT is 4.74 times more volatile than Armada Hflr Pr. It trades about 0.08 of its potential returns per unit of risk. Armada Hflr Pr is currently generating about -0.38 per unit of risk. If you would invest 125.00 in Power REIT on October 15, 2024 and sell it today you would earn a total of 8.00 from holding Power REIT or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power REIT vs. Armada Hflr Pr
Performance |
| Timeline |
| Power REIT |
| Armada Hflr Pr |
Power REIT and Armada Hflr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Armada Hflr
The main advantage of trading using opposite Power REIT and Armada Hflr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT position performs unexpectedly, Armada Hflr 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 Armada Hflr will offset losses from the drop in Armada Hflr's long position.| Power REIT vs. Newlake Capital Partners | Power REIT vs. Outfront Media | Power REIT vs. Uniti Group | Power REIT vs. Farmland Partners |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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