Correlation Between Meta Platforms and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Meta Platforms and Acadia 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 Meta Platforms and Acadia Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Platforms and Acadia Realty Trust, you can compare the effects of market volatilities on Meta Platforms and Acadia 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 Meta Platforms with a short position of Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Platforms and Acadia Realty.
Diversification Opportunities for Meta Platforms and Acadia Realty
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meta and Acadia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust and Meta Platforms 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 Meta Platforms are associated (or correlated) with Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Meta Platforms i.e., Meta Platforms and Acadia Realty go up and down completely randomly.
Pair Corralation between Meta Platforms and Acadia Realty
Allowing for the 90-day total investment horizon Meta Platforms is expected to under-perform the Acadia Realty. In addition to that, Meta Platforms is 1.78 times more volatile than Acadia Realty Trust. It trades about -0.13 of its total potential returns per unit of risk. Acadia Realty Trust is currently generating about 0.01 per unit of volatility. If you would invest 1,819 in Acadia Realty Trust on January 26, 2024 and sell it today you would lose (73.00) from holding Acadia Realty Trust or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 7.27% |
| Values | Daily Returns |
Meta Platforms vs. Acadia Realty Trust
Performance |
| Timeline |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Acadia Realty Trust |
Meta Platforms and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Platforms and Acadia Realty
The main advantage of trading using opposite Meta Platforms and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms position performs unexpectedly, Acadia 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.| Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
| Acadia Realty vs. Urban Edge Properties | Acadia Realty vs. Kite Realty Group | Acadia Realty vs. Site Centers Corp | Acadia Realty vs. Retail Opportunity Investments |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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