Correlation Between Apartment Investment and Camden Property
Can any of the company-specific risk be diversified away by investing in both Apartment Investment 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 Apartment Investment and Camden Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apartment Investment and and Camden Property Trust, you can compare the effects of market volatilities on Apartment Investment 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 Apartment Investment with a short position of Camden Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apartment Investment and Camden Property.
Diversification Opportunities for Apartment Investment and Camden Property
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Apartment and Camden is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Apartment Investment and 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 Apartment Investment 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 Apartment Investment and 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 Apartment Investment i.e., Apartment Investment and Camden Property go up and down completely randomly.
Pair Corralation between Apartment Investment and Camden Property
Considering the 90-day investment horizon Apartment Investment and is expected to generate 1.28 times more return on investment than Camden Property. However, Apartment Investment is 1.28 times more volatile than Camden Property Trust. It trades about 0.03 of its potential returns per unit of risk. Camden Property Trust is currently generating about -0.04 per unit of risk. If you would invest 627.00 in Apartment Investment and on January 20, 2024 and sell it today you would earn a total of 149.00 from holding Apartment Investment and or generate 23.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Apartment Investment and vs. Camden Property Trust
Performance |
Timeline |
Apartment Investment and |
Camden Property Trust |
Apartment Investment and Camden Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apartment Investment and Camden Property
The main advantage of trading using opposite Apartment Investment and Camden Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apartment Investment 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.Apartment Investment vs. Douglas Emmett | Apartment Investment vs. Vornado Realty Trust | Apartment Investment vs. Highwoods Properties | Apartment Investment vs. Hudson Pacific Properties |
Camden Property vs. Douglas Emmett | Camden Property vs. Vornado Realty Trust | Camden Property vs. Highwoods Properties | Camden Property vs. Hudson Pacific Properties |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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