Correlation Between Acadia Realty and Agree Realty
Can any of the company-specific risk be diversified away by investing in both Acadia Realty and Agree Realty 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 Agree Realty 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 Agree Realty, you can compare the effects of market volatilities on Acadia Realty and Agree Realty 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 Agree Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Realty and Agree Realty.
Diversification Opportunities for Acadia Realty and Agree Realty
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acadia and Agree is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Realty Trust and Agree Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agree Realty 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 Agree Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agree Realty has no effect on the direction of Acadia Realty i.e., Acadia Realty and Agree Realty go up and down completely randomly.
Pair Corralation between Acadia Realty and Agree Realty
Considering the 90-day investment horizon Acadia Realty Trust is expected to generate 1.49 times more return on investment than Agree Realty. However, Acadia Realty is 1.49 times more volatile than Agree Realty. It trades about 0.22 of its potential returns per unit of risk. Agree Realty is currently generating about 0.08 per unit of risk. If you would invest 1,604 in Acadia Realty Trust on January 24, 2024 and sell it today you would earn a total of 138.00 from holding Acadia Realty Trust or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Realty Trust vs. Agree Realty
Performance |
| Timeline |
| Acadia Realty Trust |
| Agree Realty |
Acadia Realty and Agree Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Realty and Agree Realty
The main advantage of trading using opposite Acadia Realty and Agree Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Realty position performs unexpectedly, Agree Realty 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 Agree Realty will offset losses from the drop in Agree Realty's long position.| Acadia Realty vs. Urban Edge Properties | Acadia Realty vs. Kite Realty Group | Acadia Realty vs. Site Centers Corp | Acadia Realty vs. Retail Opportunity Investments |
| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Regency Centers | Agree Realty vs. NetstreitCorp | Agree Realty 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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