Correlation Between American Campus and Camden Property
Can any of the company-specific risk be diversified away by investing in both American Campus and Camden Property 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 American Campus and Camden Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Campus Communities and Camden Property Trust, you can compare the effects of market volatilities on American Campus and Camden Property 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 American Campus with a short position of Camden Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Campus and Camden Property.
Diversification Opportunities for American Campus and Camden Property
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Camden is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding American Campus Communities and Camden Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden Property Trust and American Campus 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 American Campus Communities are associated (or correlated) with Camden Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden Property Trust has no effect on the direction of American Campus i.e., American Campus and Camden Property go up and down completely randomly.
Pair Corralation between American Campus and Camden Property
If you would invest 6,542 in American Campus Communities on January 20, 2024 and sell it today you would earn a total of 0.00 from holding American Campus Communities or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
American Campus Communities vs. Camden Property Trust
Performance |
| Timeline |
| American Campus Comm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Camden Property Trust |
American Campus and Camden Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Campus and Camden Property
The main advantage of trading using opposite American Campus and Camden Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Campus position performs unexpectedly, Camden Property 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 Camden Property will offset losses from the drop in Camden Property's long position.| American Campus vs. Ardelyx | American Campus vs. Molecular Partners AG | American Campus vs. Tscan Therapeutics | American Campus vs. Albemarle Corp |
| Camden Property vs. AvalonBay Communities | Camden Property vs. Essex Property Trust | Camden Property vs. Equity Residential | Camden Property vs. UDR Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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