Correlation Between Agree Realty and St Joe

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

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

Diversification Opportunities for Agree Realty and St Joe

-0.46

Correlation Coefficient

Agree Realty  St Joe

Very good diversification

The 3 months correlation between Agree and JOE is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and St Joe Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Joe Company 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 St Joe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Joe Company has no effect on the direction of Agree Realty i.e., Agree Realty and St Joe go up and down completely randomly.

Pair Corralation between Agree Realty and St Joe

Considering the 90-day investment horizon Agree Realty is expected to generate 0.82 times more return on investment than St Joe. However, Agree Realty is 1.22 times less risky than St Joe. It trades about 0.25 of its potential returns per unit of risk. St Joe Company is currently generating about -0.07 per unit of risk. If you would invest  7,363  in Agree Realty on August 30, 2024 and sell it today you would earn a total of  402.00  from holding Agree Realty or generate 5.46% return on investment over 90 days.

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

Agree Realty  vs.  St Joe Company

Agree Realty

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agree Realty are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Agree Realty may actually be approaching a critical reversion point that can send shares even higher in December 2024.

St Joe Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days St Joe Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Agree Realty and St Joe

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

The idea behind Agree Realty and St Joe Company 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 Global Correlations module to find global opportunities by holding instruments from different markets.