Correlation Between ACRES Commercial and Brookfield DTLA

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

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

Diversification Opportunities for ACRES Commercial and Brookfield DTLA

-0.56

Correlation Coefficient

ACRES Commercial  Brookfield DTLA

Excellent diversification

The 3 months correlation between ACRES and Brookfield is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ACRES Commercial Realty and Brookfield DTLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield DTLA and ACRES Commercial 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 ACRES Commercial Realty 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 ACRES Commercial i.e., ACRES Commercial and Brookfield DTLA go up and down completely randomly.

Pair Corralation between ACRES Commercial and Brookfield DTLA

If you would invest  2,424  in ACRES Commercial Realty on September 2, 2024 and sell it today you would earn a total of  91.00  from holding ACRES Commercial Realty or generate 3.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

ACRES Commercial Realty  vs.  Brookfield DTLA

ACRES Commercial Realty

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ACRES Commercial Realty are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ACRES Commercial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Brookfield DTLA

Risk-Adjusted Performance

0 of 100

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 ACRES Commercial and Brookfield DTLA

The main advantage of trading using opposite ACRES Commercial and Brookfield DTLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACRES Commercial 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 ACRES Commercial Realty 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.