Correlation Between Agree Realty and Alexanders

Can any of the company-specific risk be diversified away by investing in both Agree Realty and Alexanders 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 Agree Realty and Alexanders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agree Realty and Alexanders, you can compare the effects of market volatilities on Agree Realty and Alexanders 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 Agree Realty with a short position of Alexanders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Alexanders.

Diversification Opportunities for Agree Realty and Alexanders

0.41

Correlation Coefficient

Agree Realty  Alexanders

Very weak diversification

The 3 months correlation between Agree and Alexanders is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Alexanders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexanders and Agree 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 Agree Realty are associated (or correlated) with Alexanders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexanders has no effect on the direction of Agree Realty i.e., Agree Realty and Alexanders go up and down completely randomly.

Pair Corralation between Agree Realty and Alexanders

Considering the 90-day investment horizon Agree Realty is expected to generate 0.69 times more return on investment than Alexanders. However, Agree Realty is 1.44 times less risky than Alexanders. It trades about -0.01 of its potential returns per unit of risk. Alexanders is currently generating about -0.05 per unit of risk. If you would invest  5,612  in Agree Realty on January 20, 2024 and sell it today you would lose (29.00) from holding Agree Realty or give up 0.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Agree Realty  vs.  Alexanders

Agree Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agree Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Alexanders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexanders has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Agree Realty and Alexanders

The main advantage of trading using opposite Agree Realty and Alexanders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Alexanders 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 Alexanders will offset losses from the drop in Alexanders' long position.

The idea behind Agree Realty and Alexanders 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.