Correlation Between Acadia Realty and Westwater Resources
Can any of the company-specific risk be diversified away by investing in both Acadia Realty and Westwater Resources 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 Acadia Realty and Westwater Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Realty Trust and Westwater Resources, you can compare the effects of market volatilities on Acadia Realty and Westwater Resources 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 Acadia Realty with a short position of Westwater Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Realty and Westwater Resources.
Diversification Opportunities for Acadia Realty and Westwater Resources
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acadia and Westwater is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Realty Trust and Westwater Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwater Resources and Acadia Realty 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 Acadia Realty Trust are associated (or correlated) with Westwater Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwater Resources has no effect on the direction of Acadia Realty i.e., Acadia Realty and Westwater Resources go up and down completely randomly.
Pair Corralation between Acadia Realty and Westwater Resources
Assuming the 90 days horizon Acadia Realty Trust is expected to generate 0.27 times more return on investment than Westwater Resources. However, Acadia Realty Trust is 3.72 times less risky than Westwater Resources. It trades about 0.06 of its potential returns per unit of risk. Westwater Resources is currently generating about -0.14 per unit of risk. If you would invest 2,220 in Acadia Realty Trust on September 25, 2024 and sell it today you would earn a total of 60.00 from holding Acadia Realty Trust or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Realty Trust vs. Westwater Resources
Performance |
| Timeline |
| Acadia Realty Trust |
| Westwater Resources |
Acadia Realty and Westwater Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Realty and Westwater Resources
The main advantage of trading using opposite Acadia Realty and Westwater Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Realty position performs unexpectedly, Westwater Resources 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 Westwater Resources will offset losses from the drop in Westwater Resources' long position.| Acadia Realty vs. Simon Property Group | Acadia Realty vs. Realty Income | Acadia Realty vs. Kimco Realty | Acadia Realty vs. Range Resources Corp |
| Westwater Resources vs. Columbia Sportswear | Westwater Resources vs. InPlay Oil Corp | Westwater Resources vs. Playtech plc | Westwater Resources vs. Pentair plc |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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