Correlation Between Acadia Realty and Brookfield Property

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Can any of the company-specific risk be diversified away by investing in both Acadia Realty and Brookfield 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 Acadia Realty and Brookfield Property 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 Brookfield Property REIT, you can compare the effects of market volatilities on Acadia Realty and Brookfield 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 Acadia Realty with a short position of Brookfield Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Realty and Brookfield Property.

Diversification Opportunities for Acadia Realty and Brookfield Property

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Acadia and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Realty Trust and Brookfield Property REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Property REIT 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 Brookfield Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Property REIT has no effect on the direction of Acadia Realty i.e., Acadia Realty and Brookfield Property go up and down completely randomly.

Pair Corralation between Acadia Realty and Brookfield Property

If you would invest  1,638  in Acadia Realty Trust on December 30, 2023 and sell it today you would earn a total of  63.00  from holding Acadia Realty Trust or generate 3.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Acadia Realty Trust  vs.  Brookfield Property REIT

 Performance 
       Timeline  
Acadia Realty Trust 

Risk-Adjusted Performance

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Over the last 90 days Acadia Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Acadia Realty is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Brookfield Property REIT 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Brookfield Property REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Brookfield Property is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Acadia Realty and Brookfield Property Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Acadia Realty and Brookfield Property

The main advantage of trading using opposite Acadia Realty and Brookfield Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Realty position performs unexpectedly, Brookfield 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 Brookfield Property will offset losses from the drop in Brookfield Property's long position.
The idea behind Acadia Realty Trust and Brookfield Property REIT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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