Correlation Between Retail Opportunity and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Retail Opportunity and Acadia 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 Retail Opportunity and Acadia Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Opportunity Investments and Acadia Realty Trust, you can compare the effects of market volatilities on Retail Opportunity and Acadia 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 Retail Opportunity with a short position of Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Opportunity and Acadia Realty.
Diversification Opportunities for Retail Opportunity and Acadia Realty
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Retail and Acadia is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Retail Opportunity Investments and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust and Retail Opportunity 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 Retail Opportunity Investments are associated (or correlated) with Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Retail Opportunity i.e., Retail Opportunity and Acadia Realty go up and down completely randomly.
Pair Corralation between Retail Opportunity and Acadia Realty
Given the investment horizon of 90 days Retail Opportunity Investments is expected to generate 0.08 times more return on investment than Acadia Realty. However, Retail Opportunity Investments is 12.85 times less risky than Acadia Realty. It trades about 0.15 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about -0.09 per unit of risk. If you would invest 1,736 in Retail Opportunity Investments on November 1, 2024 and sell it today you would earn a total of 8.00 from holding Retail Opportunity Investments or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Opportunity Investments vs. Acadia Realty Trust
Performance |
| Timeline |
| Retail Opportunity |
| Acadia Realty Trust |
Retail Opportunity and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Opportunity and Acadia Realty
The main advantage of trading using opposite Retail Opportunity and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Opportunity position performs unexpectedly, Acadia 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.| Retail Opportunity vs. Kite Realty Group | Retail Opportunity vs. Rithm Property Trust | Retail Opportunity vs. Urban Edge Properties | Retail Opportunity vs. Acadia Realty Trust |
| Acadia Realty vs. Rithm Property Trust | Acadia Realty vs. Urban Edge Properties | Acadia Realty vs. Kite Realty Group | Acadia Realty vs. Site Centers Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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