Correlation Between Agree Realty and Carlyle

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

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

Diversification Opportunities for Agree Realty and Carlyle

0.74

Correlation Coefficient

Agree Realty  Carlyle

Poor diversification

The 3 months correlation between Agree and Carlyle is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Agree Realty i.e., Agree Realty and Carlyle go up and down completely randomly.

Pair Corralation between Agree Realty and Carlyle

Assuming the 90 days trading horizon Agree Realty is expected to generate 0.96 times more return on investment than Carlyle. However, Agree Realty is 1.04 times less risky than Carlyle. It trades about -0.19 of its potential returns per unit of risk. The Carlyle Group is currently generating about -0.3 per unit of risk. If you would invest  1,925  in Agree Realty on September 24, 2024 and sell it today you would lose (72.00) from holding Agree Realty or give up 3.74% of portfolio value over 90 days.

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

Agree Realty  vs.  The Carlyle Group

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. Despite latest unsteady performance, the Preferred Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Agree Realty and Carlyle

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

The idea behind Agree Realty and The Carlyle Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.