Correlation Between Western Union and Acres Commercial
Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and Acres Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Acres Commercial Realty, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of Acres Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Acres Commercial.
Diversification Opportunities for Western Union and Acres Commercial
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Acres is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co 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 Western Union 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 Western Union Co 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 Western Union i.e., Western Union and Acres Commercial go up and down completely randomly.
Pair Corralation between Western Union and Acres Commercial
Allowing for the 90-day total investment horizon Western Union is expected to generate 6.07 times less return on investment than Acres Commercial. In addition to that, Western Union is 1.47 times more volatile than Acres Commercial Realty. It trades about 0.03 of its total potential returns per unit of risk. Acres Commercial Realty is currently generating about 0.24 per unit of volatility. If you would invest 1,768 in Acres Commercial Realty on November 18, 2024 and sell it today you would earn a total of 128.00 from holding Acres Commercial Realty or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. Acres Commercial Realty
Performance |
| Timeline |
| Western Union |
| Acres Commercial Realty |
Western Union and Acres Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Acres Commercial
The main advantage of trading using opposite Western Union and Acres Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| Acres Commercial vs. Lument Finance Trust | Acres Commercial vs. AG Mortgage Investment | Acres Commercial vs. Rithm Capital Corp | Acres Commercial vs. Cherry Hill Mortgage |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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