Correlation Between Via Renewables and Arbor Realty
Can any of the company-specific risk be diversified away by investing in both Via Renewables and Arbor 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 Via Renewables and Arbor Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Via Renewables and Arbor Realty Trust, you can compare the effects of market volatilities on Via Renewables and Arbor 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 Via Renewables with a short position of Arbor Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Arbor Realty.
Diversification Opportunities for Via Renewables and Arbor Realty
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Via and Arbor is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Arbor Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Realty Trust and Via Renewables 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 Via Renewables are associated (or correlated) with Arbor Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Realty Trust has no effect on the direction of Via Renewables i.e., Via Renewables and Arbor Realty go up and down completely randomly.
Pair Corralation between Via Renewables and Arbor Realty
Assuming the 90 days horizon Via Renewables is expected to generate 0.69 times more return on investment than Arbor Realty. However, Via Renewables is 1.45 times less risky than Arbor Realty. It trades about 0.39 of its potential returns per unit of risk. Arbor Realty Trust is currently generating about -0.19 per unit of risk. If you would invest 2,090 in Via Renewables on August 27, 2024 and sell it today you would earn a total of 156.00 from holding Via Renewables or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Via Renewables vs. Arbor Realty Trust
Performance |
| Timeline |
| Via Renewables |
| Arbor Realty Trust |
Via Renewables and Arbor Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Via Renewables and Arbor Realty
The main advantage of trading using opposite Via Renewables and Arbor Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Via Renewables position performs unexpectedly, Arbor 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 Arbor Realty will offset losses from the drop in Arbor Realty's long position.| Via Renewables vs. CMS Energy | Via Renewables vs. ACRES Commercial Realty | Via Renewables vs. Atlanticus Holdings 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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