Correlation Between Arbor Realty and Brookfield DTLA

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

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

Diversification Opportunities for Arbor Realty and Brookfield DTLA

0.0

Correlation Coefficient

Arbor Realty  Brookfield DTLA

Pay attention - limited upside

The 3 months correlation between Arbor and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and Brookfield DTLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield DTLA and Arbor 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 Arbor Realty Trust are associated (or correlated) with Brookfield DTLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield DTLA has no effect on the direction of Arbor Realty i.e., Arbor Realty and Brookfield DTLA go up and down completely randomly.

Pair Corralation between Arbor Realty and Brookfield DTLA

If you would invest (100.00) in Brookfield DTLA on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Brookfield DTLA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Arbor Realty Trust  vs.  Brookfield DTLA

Arbor Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arbor Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Brookfield DTLA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield DTLA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Brookfield DTLA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Arbor Realty and Brookfield DTLA

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

The idea behind Arbor Realty Trust and Brookfield DTLA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.