Correlation Between Camden Property and American Campus
Can any of the company-specific risk be diversified away by investing in both Camden Property 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 Camden Property and American Campus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camden Property Trust and American Campus Communities, you can compare the effects of market volatilities on Camden Property 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 Camden Property with a short position of American Campus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camden Property and American Campus.
Diversification Opportunities for Camden Property and American Campus
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Camden and American is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Camden Property Trust 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 Camden Property 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 Camden Property Trust 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 Camden Property i.e., Camden Property and American Campus go up and down completely randomly.
Pair Corralation between Camden Property and American Campus
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 |
Camden Property Trust vs. American Campus Communities
Performance |
| Timeline |
| Camden Property Trust |
| American Campus Comm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Camden Property and American Campus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camden Property and American Campus
The main advantage of trading using opposite Camden Property and American Campus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camden Property 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.| Camden Property vs. AvalonBay Communities | Camden Property vs. Essex Property Trust | Camden Property vs. Equity Residential | Camden Property vs. UDR Inc |
| American Campus vs. Ardelyx | American Campus vs. Molecular Partners AG | American Campus vs. Tscan Therapeutics | American Campus vs. Albemarle Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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