Correlation Between Necessity Retail and Armada Hoffler
Can any of the company-specific risk be diversified away by investing in both Necessity Retail and Armada Hoffler 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 Necessity Retail and Armada Hoffler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Necessity Retail REIT and Armada Hoffler Properties, you can compare the effects of market volatilities on Necessity Retail and Armada Hoffler 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 Necessity Retail with a short position of Armada Hoffler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Necessity Retail and Armada Hoffler.
Diversification Opportunities for Necessity Retail and Armada Hoffler
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Necessity and Armada is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Necessity Retail REIT and Armada Hoffler Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hoffler Properties and Necessity Retail 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 Necessity Retail REIT are associated (or correlated) with Armada Hoffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hoffler Properties has no effect on the direction of Necessity Retail i.e., Necessity Retail and Armada Hoffler go up and down completely randomly.
Pair Corralation between Necessity Retail and Armada Hoffler
Assuming the 90 days horizon Necessity Retail REIT is expected to generate 1.19 times more return on investment than Armada Hoffler. However, Necessity Retail is 1.19 times more volatile than Armada Hoffler Properties. It trades about 0.06 of its potential returns per unit of risk. Armada Hoffler Properties is currently generating about 0.05 per unit of risk. If you would invest 1,893 in Necessity Retail REIT on August 27, 2024 and sell it today you would earn a total of 212.00 from holding Necessity Retail REIT or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.65% |
| Values | Daily Returns |
Necessity Retail REIT vs. Armada Hoffler Properties
Performance |
| Timeline |
| Necessity Retail REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Armada Hoffler Properties |
Necessity Retail and Armada Hoffler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Necessity Retail and Armada Hoffler
The main advantage of trading using opposite Necessity Retail and Armada Hoffler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Necessity Retail position performs unexpectedly, Armada Hoffler 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 Hoffler will offset losses from the drop in Armada Hoffler's long position.| Necessity Retail vs. SiriusPoint | Necessity Retail vs. RLJ Lodging Trust | Necessity Retail vs. New York Mortgage | Necessity Retail vs. Global Net Lease |
| Armada Hoffler vs. Artis REIT | Armada Hoffler vs. Ascott Residence Trust | Armada Hoffler vs. Armada Hflr Pr |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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