Correlation Between Associated Capital and Realty Income
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Realty Income 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 Associated Capital and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Realty Income Corp, you can compare the effects of market volatilities on Associated Capital and Realty Income 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 Associated Capital with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Realty Income.
Diversification Opportunities for Associated Capital and Realty Income
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Associated and Realty is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Realty Income Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty me Corp and Associated Capital 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 Associated Capital Group are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty me Corp has no effect on the direction of Associated Capital i.e., Associated Capital and Realty Income go up and down completely randomly.
Pair Corralation between Associated Capital and Realty Income
Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the Realty Income. But the stock apears to be less risky and, when comparing its historical volatility, Associated Capital Group is 1.29 times less risky than Realty Income. The stock trades about -0.06 of its potential returns per unit of risk. The Realty Income Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,888 in Realty Income Corp on January 24, 2024 and sell it today you would lose (555.00) from holding Realty Income Corp or give up 9.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Realty Income Corp
Performance |
| Timeline |
| Associated Capital |
| Realty me Corp |
Associated Capital and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Realty Income
The main advantage of trading using opposite Associated Capital and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. AssetMark Financial Holdings | Associated Capital vs. Blackrock Muni Intermediate |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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