Correlation Between Sun Communities and Americold Realty
Can any of the company-specific risk be diversified away by investing in both Sun Communities and Americold 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 Sun Communities and Americold Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Communities and Americold Realty Trust, you can compare the effects of market volatilities on Sun Communities and Americold 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 Sun Communities with a short position of Americold Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Communities and Americold Realty.
Diversification Opportunities for Sun Communities and Americold Realty
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Americold is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sun Communities and Americold Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americold Realty Trust and Sun Communities 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 Sun Communities are associated (or correlated) with Americold Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americold Realty Trust has no effect on the direction of Sun Communities i.e., Sun Communities and Americold Realty go up and down completely randomly.
Pair Corralation between Sun Communities and Americold Realty
Considering the 90-day investment horizon Sun Communities is expected to generate 1.01 times more return on investment than Americold Realty. However, Sun Communities is 1.01 times more volatile than Americold Realty Trust. It trades about 0.07 of its potential returns per unit of risk. Americold Realty Trust is currently generating about -0.04 per unit of risk. If you would invest 11,503 in Sun Communities on August 30, 2024 and sell it today you would earn a total of 1,353 from holding Sun Communities or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Communities vs. Americold Realty Trust
Performance |
| Timeline |
| Sun Communities |
| Americold Realty Trust |
Sun Communities and Americold Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Communities and Americold Realty
The main advantage of trading using opposite Sun Communities and Americold Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Communities position performs unexpectedly, Americold 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 Americold Realty will offset losses from the drop in Americold Realty's long position.| Sun Communities vs. Clipper Realty | Sun Communities vs. UDR Inc | Sun Communities vs. UMH Properties | Sun Communities vs. Apartment Investment and |
| Americold Realty vs. Rexford Industrial Realty | Americold Realty vs. Terreno Realty | Americold Realty vs. First Industrial Realty | Americold Realty vs. Plymouth Industrial REIT |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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