Correlation Between Alexanders and Acadia Realty

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Can any of the company-specific risk be diversified away by investing in both Alexanders 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 Alexanders and Acadia Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexanders and Acadia Realty Trust, you can compare the effects of market volatilities on Alexanders 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 Alexanders with a short position of Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexanders and Acadia Realty.

Diversification Opportunities for Alexanders and Acadia Realty

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Alexanders and Acadia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alexanders 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 Alexanders 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 Alexanders 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 Alexanders i.e., Alexanders and Acadia Realty go up and down completely randomly.

Pair Corralation between Alexanders and Acadia Realty

Considering the 90-day investment horizon Alexanders is expected to generate 0.86 times more return on investment than Acadia Realty. However, Alexanders is 1.16 times less risky than Acadia Realty. It trades about 0.01 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about 0.0 per unit of risk. If you would invest  21,812  in Alexanders on December 29, 2023 and sell it today you would lose (221.00) from holding Alexanders or give up 1.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Alexanders  vs.  Acadia Realty Trust

 Performance 
       Timeline  
Alexanders 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Alexanders are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Alexanders is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Acadia Realty Trust 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
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.

Alexanders and Acadia Realty Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alexanders and Acadia Realty

The main advantage of trading using opposite Alexanders and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexanders 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.
The idea behind Alexanders and Acadia Realty Trust 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.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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