Correlation Between Necessity Retail and ACRES Commercial
Can any of the company-specific risk be diversified away by investing in both Necessity Retail and ACRES Commercial 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 ACRES Commercial 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 ACRES Commercial Realty, you can compare the effects of market volatilities on Necessity Retail and ACRES Commercial 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 ACRES Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Necessity Retail and ACRES Commercial.
Diversification Opportunities for Necessity Retail and ACRES Commercial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Necessity and ACRES is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Necessity Retail REIT and ACRES Commercial Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACRES Commercial Realty 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 ACRES Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACRES Commercial Realty has no effect on the direction of Necessity Retail i.e., Necessity Retail and ACRES Commercial go up and down completely randomly.
Pair Corralation between Necessity Retail and ACRES Commercial
If you would invest 2,444 in ACRES Commercial Realty on November 1, 2024 and sell it today you would earn a total of 42.00 from holding ACRES Commercial Realty or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Necessity Retail REIT vs. ACRES Commercial Realty
Performance |
| Timeline |
| Necessity Retail REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ACRES Commercial Realty |
Necessity Retail and ACRES Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Necessity Retail and ACRES Commercial
The main advantage of trading using opposite Necessity Retail and ACRES Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Necessity Retail position performs unexpectedly, ACRES Commercial 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 ACRES Commercial will offset losses from the drop in ACRES Commercial's long position.| Necessity Retail vs. RLJ Lodging Trust | Necessity Retail vs. PennyMac Mortgage Investment | Necessity Retail vs. Invesco Mortgage Capital | Necessity Retail vs. New York Mortgage |
| ACRES Commercial vs. Cherry Hill Mortgage | ACRES Commercial vs. AGNC Investment Corp | ACRES Commercial vs. Chimera Investment | ACRES Commercial vs. Two Harbors Investment |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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