Correlation Between ARMOUR Residential and American Campus
Can any of the company-specific risk be diversified away by investing in both ARMOUR Residential and American Campus 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 ARMOUR Residential and American Campus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARMOUR Residential REIT and American Campus Communities, you can compare the effects of market volatilities on ARMOUR Residential and American Campus 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 ARMOUR Residential with a short position of American Campus. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARMOUR Residential and American Campus.
Diversification Opportunities for ARMOUR Residential and American Campus
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between ARMOUR and American is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ARMOUR Residential REIT and American Campus Communities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Campus Comm and ARMOUR Residential 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 ARMOUR Residential REIT are associated (or correlated) with American Campus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Campus Comm has no effect on the direction of ARMOUR Residential i.e., ARMOUR Residential and American Campus go up and down completely randomly.
Pair Corralation between ARMOUR Residential and American Campus
If you would invest 6,542 in American Campus Communities on January 24, 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 Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
ARMOUR Residential REIT vs. American Campus Communities
Performance |
| Timeline |
| ARMOUR Residential REIT |
| American Campus Comm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ARMOUR Residential and American Campus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARMOUR Residential and American Campus
The main advantage of trading using opposite ARMOUR Residential and American Campus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARMOUR Residential position performs unexpectedly, American Campus 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 American Campus will offset losses from the drop in American Campus' long position.| ARMOUR Residential vs. Ellington Financial LLC | ARMOUR Residential vs. Two Harbors Investments | ARMOUR Residential vs. Dynex Capital | ARMOUR Residential vs. Ellington Residential Mortgage |
| American Campus vs. National Vision Holdings | American Campus vs. Vishay Intertechnology | American Campus vs. Coupang LLC | American Campus vs. Micron Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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